The managers of the Woodford Co. are considering increasing the amount of debt in their...
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The managers of the Woodford Co. are considering increasing the amount of debt in their capital structure. The firm's current market-based debt-to-asset ratio is 28%, its beta is 0.76 , and the marginal tax rate is the statutory 21%. If the firm increases its debt-to-asset ratio to 54%, use the Hamada Relationship to estimate the firm's beta at the new capital structure. 1.12 1.46 0.39 0.62 0.89
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