Question
In: Finance
Bailey and Sons has a levered beta of 1.10, its capital structure consists of 40% debt...
Bailey and Sons has a levered beta of 1.10, its capital structure consists of 40% debt and 60% equity, and its tax rate is 25%. What would Bailey's beta be if it used no debt, i.e., what is its unlevered beta?
Solutions
Expert Solution
Unlevered Beta = Levered Beta/(1+D/E *(1-t))
= 1.10/(1+ 40/60*(1-25%))
Unlevered beta = 0.733
jeff jeffy answered 1 year agoRelated Solutions
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