Wang Securities had debt-to-equity ratio of 0.65. The CFO wants to issue some stock and buy back and equivalent amount of debt. It is estimated that the debt-to-equity ratio after this action will be 0.55. The increased leverage has what effect on unlevered beta and levered beta of the company?
a. The unlevered beta and the levered beta will both rise.
b. The unlevered beta will remain the same and the levered beta will decline.
c. The unlevered beta will increase, and levered beta will decline.
d. The unlevered beta and levered beta will both decline.
e. The unlevered beta will remain the same and the levered beta will rise
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Wang Securities had debt-to-equity ratio of 0.65. The CFO wants to issue some stock and buy back and equivalent amount of debt. It is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
An increase in the demand for loanable funds will occur if there is A. an increase in the real interest rate. B. an increase in the nominal interest rate accompanied by an equal increase in inflation. C. a decrease in the real interest rate. D.
Answers (2)
SDJ, Inc., has net working capital of $2,170, current liabilities of $4,590, and inventory of $3,860. a. What is the current ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) b.
Answers (1)
Which of the following questions is inappropriate on an internal control questionnaire concerning purchase transactions? A. Are an approved purchase requisition and a signed purchase order required for each purchase? B.
Answers (1)
A firm must to be a multinational enterprise to engage in international business. Select one: True False
Answers (1)
The incentive problem under communist central planning refers to the idea that: A. planners had to direct required inputs to each enterprise. B.
Answers (1)
New Questions in Business
A 10% increase in the price of movie ticket in Westridge 8 leads to a 15% decrease in the number of tickets sold, indicating the demand for movie ticket in Westridge 8 is: a) elastic. b) inelastic. c) unit elastic.
Answers (1)
2. Let's work out a simple example where a person smooths her consumption over time. Gwen is a real estate agent, and she knows that she will have some good years and some bad years.
Answers (1)
What is the process of an economy's increasing industrialization, standard of living, and economic wealth.
Answers (2)
the context of bringing the code of ethics of a company to life, which of the following statements is true when experts try to advocate a forceful, integrated approach to ethics?
Answers (1)
Privatisation leads to ... A) Lower productivity and lower profit B) Higher productivity and higher profit C) Higher productivity and lower profit D) lower producitivity and lower profit
Answers (1)