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Author Question: Assume that the firms gain from leverage according to the Miller model is $175,880. If the effective ... (Read 290 times)

Sadjam2

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on: Aug 7, 2023

Question 1

Ang Enterprises has a levered beta of 1.2, its capital structure consists of 45% debt and 55% equity, and its tax rate is 35%. What would Ang’s beta be if it used no debt; that is, what is its unlevered beta?

◦

0.69


◦

0.78


◦

0.83


◦

0.90



Question 2

Assume that the firm’s gain from leverage according to the Miller model is $175,880. If the effective personal tax rate on stock income is Ts= 22%, what is the implied personal tax rate on debt income if the following is true? 

EBIT = $200,000, rd = 13%, Tc = 33%, Debt = $600,000, rsU = 17%.


◦

25.52%


◦

26.07%


◦

26.85%


◦

27.30%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Sadjam2 on Aug 7, 2023

swagmaster69

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Sadjam2

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

CAPTAINAMERICA

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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