Robotics inc has a current capital structure of 30 debt and, Ask an Expert

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Robotics Inc. has a current capital structure of 30% debt and 70% equity. Its current before tax cost of debt is 10%, and its tax rate is 40%. It currently has a levered beta of 1.15. The risk free are is 3.5% and the risk premium on the market is 7%. U.s. Robotics Inc. is considering changing its capital structure to 60% debt and 40% equity. Increasing the firms level of debt will because its before tax cost of debt to increase to 12%. 1. What is Robotics unlevered beta?

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Financial Management, Finance

Category:- Financial Management
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