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ASM IFM Exercise 7.26
I'm confused by a part of the answer for ASM IFM Exercise 7.26
For this problem, looking at the company Anthony's Best, Equity is 5000 shares x $120 = 600,000 Debt is 1,000,000 Cash is 1,200,000 We want to calculated unlevered beta for the company In the answer, enterprise value E + D is calculated as 600,000+1,000,0001,200,000 = 400,000 why is the second term (for debt beta) calculated this way? D/(D+E) = 1,000,000 / 400,000 and not 200,000 / 400,000, where D = 1,000,0001,200,000 = 200,000?
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