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Two firms have the same operating structure and the same operating systematic risk, ß = .8. firm 1 has 20% debt in their capital structure while Firm 2 has four units of debt for every 7 units of equity. The tax rate faced by both firms is.4. The debt beta is assumed to zero. What is the difference in systematic risk between the riskier firm and the less risky firm?
Explanatory
Pertaining to a variable in a statistical model that is used to explain or predict changes in a response variable.
Response
In statistics, the answer or reaction to some stimulus or experiment; in communication, it's the reply or reaction to a message or question.
Air Pressure
The force exerted onto a surface by the weight of the air above that surface in the atmosphere of Earth.
Altitude
The height of an object or point in relation to sea level or ground level.
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