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A levered firm has only 2 assets on its balance sheet with the below market values and CAPM betas. The risk free rate is 3% pa and the market nisk premium is 5% pa. Assume that the CAPM is correct and all assets are fairly priced. Selected Company Details Market value ($mBeta Item Cash asset 0.5 D 0.5 2 Truck asset Los liabilities Equity funding 0.25 01 7 2 Which of the following statements is NOT correct? Tha: Select one: a Firm's merket value of equity is $0.75m. and debt-10-assets ratio is 25% . -% Ob Equity bets 1.3. c. Equity required return is 10% pa d. Required return on debt is 2.6% pa WACC before takis 8% Clear my choice A levered firm has only 2 assets on its balance sheet with the below market values and CAPM betes. The risk free rate is 3% pe and the market risk premium is 5% pa. Assume that the CAPM is correct and all assets are fairly priced, Selected Company Details Market value ($m! Beta Item Cash asset 0.5 Truck Bet 0.5 2 Loan liabilities 0.25 0.1 Equity funding ? 2 The firm then pays off retines, all of its loan abilities using its cash, Ignore interest tar shields, which of the following statements is NOT correct? All answers are given to 6 decimal places. This event led to a Select : & $0.25m decrease in loans to zero and cash to $0.25m. Ob Rise in the asset beta to 1.333333 and recuired return on Assets for WACC before tax) to 9.666667% pa ce Rise in the equity bata to 2 and required retum an equity to 13% pa O d. Fall in the debt-to-assets ratio to zero. Claw my cholen A leverad firm has only 2 assets on its balance sheet with the below market values and CAPM betas. The risk free rate is 3% pa and the market risk premium is 5% pa. Assume that the CAPM is correct and all assets and fairly priced. Selected Company Details Item Market value ($m! Beta Cash asset 0.5 D Truck asse 0.5 2 Loan liabilities 0.25 01 Equity funding 2 The firm than raises $1m more cash by writing more loans. Assume that the beta and yield on the new and editing loan llabilities are equal and unchanged compared to before. Ignore interest tax shields. All figures are glven to 6 decimal places. Which of the following statements is NOT correct? This event led to a Select one: O a $im increase in loan abilities to $1.25m and cash to $1.5m. * Increase in the debt-to-assets ratin to 62.5% OC Asset bota of 0.5 and required return on assets for WACC before tax) of 5.5% pa d. Equity beta of 1.166867 and required return of 9.822332% pa A levered firm has only 2 assets on its balance sheet with the below market values and CAPM betas. The risk free rate is 3% pa and the market nisk premium is 5% pa. Assume that the CAPM is correct and all assets are fairly priced. Selected Company Details Market value ($mBeta Item Cash asset 0.5 D 0.5 2 Truck asset Los liabilities Equity funding 0.25 01 7 2 Which of the following statements is NOT correct? Tha: Select one: a Firm's merket value of equity is $0.75m. and debt-10-assets ratio is 25% . -% Ob Equity bets 1.3. c. Equity required return is 10% pa d. Required return on debt is 2.6% pa WACC before takis 8% Clear my choice A levered firm has only 2 assets on its balance sheet with the below market values and CAPM betes. The risk free rate is 3% pe and the market risk premium is 5% pa. Assume that the CAPM is correct and all assets are fairly priced, Selected Company Details Market value ($m! Beta Item Cash asset 0.5 Truck Bet 0.5 2 Loan liabilities 0.25 0.1 Equity funding ? 2 The firm then pays off retines, all of its loan abilities using its cash, Ignore interest tar shields, which of the following statements is NOT correct? All answers are given to 6 decimal places. This event led to a Select : & $0.25m decrease in loans to zero and cash to $0.25m. Ob Rise in the asset beta to 1.333333 and recuired return on Assets for WACC before tax) to 9.666667% pa ce Rise in the equity bata to 2 and required retum an equity to 13% pa O d. Fall in the debt-to-assets ratio to zero. Claw my cholen A leverad firm has only 2 assets on its balance sheet with the below market values and CAPM betas. The risk free rate is 3% pa and the market risk premium is 5% pa. Assume that the CAPM is correct and all assets and fairly priced. Selected Company Details Item Market value ($m! Beta Cash asset 0.5 D Truck asse 0.5 2 Loan liabilities 0.25 01 Equity funding 2 The firm than raises $1m more cash by writing more loans. Assume that the beta and yield on the new and editing loan llabilities are equal and unchanged compared to before. Ignore interest tax shields. All figures are glven to 6 decimal places. Which of the following statements is NOT correct? This event led to a Select one: O a $im increase in loan abilities to $1.25m and cash to $1.5m. * Increase in the debt-to-assets ratin to 62.5% OC Asset bota of 0.5 and required return on assets for WACC before tax) of 5.5% pa d. Equity beta of 1.166867 and required return of 9.822332% pa

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