Question $3(1$ point$)$

Firm ABC had a beta of $1\mathrm{.}95$ in $2023.$ No debt outstanding at the end of the $2023$ is

recorded. How much of ABC $\text{'}$s risk can be attributed to business risk?

$100\%$

$50\%$

$25\%$

$75\%$

$$ View hint for Question $3$

Question $4(4$ points$)$

The company ABC had debt outstanding of $$1\mathrm{.}7$ billion and market value of equity of

$$1\mathrm{.}5$ billion. The marginal tax rate was $36\%.$ Given the current beta is $0\mathrm{.}95,$ what's

the unlevered beta for the ABC $?$

How much of the risk in ABC can be attributed to business risk?

A$)$ How much of the risk in ABC can be

attributed to financial risk?

A

D View hint for Question $4$