Your Firm Is Planning to Invest in a New Electrostatic

question 28

Multiple Choice

Your firm is planning to invest in a new electrostatic power generation system.Electrostat Inc is a firm that specializes in this business.Electrostat has a stock price of $25 per share with 16 million shares outstanding.Electrostat's equity beta is 1.18.It also has $220 million in debt outstanding with a debt beta of 0.08.Your estimate of the asset beta for electrostatic power generators is closest to:

• A)0.76.
• B)0.79.
• C)0.93.
• D)1.10.

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Definitions:

Neuroticism

An attribute of one's character identified by changeable temperaments, unease, and unpredictable emotional reactions.

Committed Relationships

Bonds between individuals that are typified by mutual affection, love, trust, and the decision to remain together, often in a formalized arrangement like marriage.

Intellectual Ideas

Intellectual ideas pertain to or involve the exercise of the intellect, innovative concepts, or theories.

Philosophy

The study of fundamental nature of knowledge, reality, and existence, especially when considered as an academic discipline.