Question: answer fast in 5 mins Vimal Enterprises is considering a shipping project for which it proposes to employ a debt-equity ratio of 27 ta pro-tax

answer fast in 5 mins answer fast in 5 mins Vimal Enterprises is considering a shipping project

Vimal Enterprises is considering a shipping project for which it proposes to employ a debt-equity ratio of 27 ta pro-tax cost of debt will be 12 percent and its expected tax rate is 30 percent. There are three firms, Aay, Bee and Com engaged wholly in shipping. Their tax rate is 35 percent. Their equity betas and debt-equity ratios are as follows: Firm Equity Beta Debt-Equity Ratio Hay 1.4 2 Boo 1.2 1.8 2 Coo 1.1 1.5 (a) What is the average asset bota of the three firms Aay, Boo, and Coo? (b) What is the beta of the equity for the shipping project of Vimal Enterprises

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