The Delta Company Has a Capital Structure of 30% Risky $\beta$

question 33

Multiple Choice

The Delta Company has a capital structure of 30% risky debt with a $\beta$ of 1.1 and 70% equity with a $\beta$ of 1.4.Their current tax rate is 30%.What is the $\beta$ for Delta Company?

• A)0.95
• B)1.00
• C)1.10
• D)1.31
• E)1.40

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Definitions:

3C Model

A business model that focuses on three key factors: Company, Customer, and Competitor, to guide strategic development and decision-making.

Coordination

Coordination refers to the process of organizing people or groups so that they work together efficiently and effectively.

Cooperation

A process where individuals, organizations, or countries work together towards common goals or interests.

Resource Dependency

A theory that organizations depend on external resources to function, and their strategies are designed to acquire and maintain these resources.