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Biogen, a biotechnology firm, had a beta of 1.70 in 2014. It had no debt outstanding at the end of that year.

a. Estimate the cost of equity for Biogen, if the Treasury bond rate is 6.4 percent.

b. What effect will an increase in long-term bond rates to 7.5 percent have on Biogen’s cost of equity?

Financial Management, Finance

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  • Reference No.:- M91624491

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