SOLUTION:
Every business either start from equity financing or debt financing.
In 1st question we need to ungare beta because the beta of the
industry is which the proposed projuect fall has debt to equity ratio
but new project always start from equity financing.
Part 2: Calculate Beta:
Ungear Equity Beta: Gbeta x ( E/E + D(1-Tax)
For Dalta Company = 0.8 x (100/100 + 0(1-35% )
= 0.28
For Marina Company = 2 x (70/70 + 30(1-35% )
= 2.55
========================
On Wed, Jun 6, 2012 at 8:39 AM, adnan khalid <adnank896@gmail.com> wrote:
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