The Tenplen Corporation Has an Asset Beta of 1

question 61

Multiple Choice

The Tenplen Corporation has an asset beta of 1.05 and a debt beta of.8. The debt portion of the capital structure in market terms is.375. Tenplen has a zero tax rate. What is the equity beta?

• A) 0.80.
• B) 0.90.
• C) 1.05.
• D) 1.20.
• E) 0.40.

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Definitions:

Foreign Exchange Rate

The rate or price at which one currency can be exchanged for another, influencing international trade and investment.

Interest

The cost of borrowing money or the income earned from lending money, usually expressed as a percentage of the principal.

Exchange Rates

The value of one currency expressed in terms of another currency, used in international transactions and foreign exchange markets.

Foreign Exchange Loss

A decrease in domestic currency value due to holding foreign currency or financial instruments as they depreciate against the home currency.