As the result of stockholder pressure, RJR Nabisco is considering spinning off its food division. You have been asked to estimate the equity beta for the food division and decide to do so by obtaining the betas of comparable publicly traded firms in that line of business. The average levered beta of these firms is 0.95, and the average debt/equity ratio of these firms is 35 percent. Nabisco's food division is expected to have a debt/equity ratio of 35 percent. The marginal corporate tax rate is 36 percent. What would be the levered beta of RJR Nabisco's food division
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As the result of stockholder pressure, RJR Nabisco is considering spinning off its food division. Yo...
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