Indell stock has a current market value of $150 million and a beta of 2.00. Indell...
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Indell stock has a current market value of $150 million and a beta of 2.00. Indell currently has risk-free debt as well. The firm decides to change its capital structure by issuing $21.17 million in additional risk- free debt, and then using this $21.17 million plus another $16 million in cash to repurchase stock. With perfect capital markets, what will the beta of Indell stock be after this transaction? Indell stock has a current market value of $150 million and a beta of 2.00. Indell currently has risk-free debt as well. The firm decides to change its capital structure by issuing $21.17 million in additional risk- free debt, and then using this $21.17 million plus another $16 million in cash to repurchase stock. With perfect capital markets, what will the beta of Indell stock be after this transaction?
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The beta of a companys stock measures the sensitivity of the stocks returns to the returns of the ov... View the full answer
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