Zolar Corp

question 30

Multiple Choice

Zolar Corp. The following data pertains to Zolar Corp., a manufacturer of ball bearings (dollar amounts in millions) :
Assume that Zolar is a potential leveraged buyout candidate. Assume that the buyer intends to put in place a capital structure with that has 70 percent debt with a pre tax borrowing cost of 14 percent and 30 percent common equity. Compute the revised equity beta for Zolar based on the new capital structure.

• A) 1.24
• B) 4.77
• C) 4.34
• D) 3.91

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Definitions:

Effort

The use of physical or mental energy to achieve a goal or complete a task.

Three-Person Trip

an outing or journey undertaken by a group of three individuals together.

Gordon Allport

An influential American psychologist known for his extensive research in personality and the psychology of prejudice.

Attitudes

Global evaluations toward some object or issue