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Hi John
for the above calculation , in the absence of the market value of Equity and debt
if we are told 0.2 debt to equity or 70% Equity and 30% Dec debtwhat amounts should we insert into the formual to calculate the Beta A
I am getting confusedThanks
DineshAgain, I go through all of this in my free lectures! Why have you not watched them- they have been online for a long time?
If it is 0.2 debt to equity, then for every 100 equity there is 20 debt. So Ve is 100 and Vd is 20.
If it it 70% equity and 30% debt, then Ve is 70% (or 0.7) and Vd is 30% (or 0.3).
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