Barges Has an Asset Beta of

question 52

Multiple Choice

Barges has an asset beta of .57,the risk-free rate is 4.3 percent,and the market risk premium is 7.7 percent.What is the equity beta if the firm has a debt-equity ratio of .56?

• A).46
• B).89
• C).74
• D).37
• E).32

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Definitions:

Initial Capital Requirements

The initial amount of money needed to start a business or investment, covering costs like equipment, inventory, and leasing.

Long-Term Assets

Are resources or investments owned by a company expected to provide value for more than one year, such as land, buildings, machinery, and intellectual property.

Guarantors

Individuals or entities that agree to be responsible for another's debt or obligations if the original party fails to meet its terms.

Loan Endorsers

Individuals or entities that support or guarantee the repayment of a loan, thereby assuming the risk if the original borrower fails to repay.