A company has a financial structure consisting of 30% debt and 70% equity. If the βeta of the firm's assets is 0.8 and the debt is risk-free. Calculate:
a) The βeta of the company's shareholders.
b) Assuming a risk-free rate of 5% and a risk premium of 8%, determine the return required by the company's shareholders and the return on the company's assets.
c) Represent graphically.
A company has a financial structure consisting of 30% debt and 70% equity. If the βeta of the firm's assets is 0.8 and t
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