Answer to Question #83945 in Finance for Jay
1) If a firm borrows £20 million for one year at an interest rate of 4%, approximately what is
the present value of the interest tax shield? Assume a 20% marginal corporate tax rate.
2) What is the standard deviation of the portfolio that consists of A and B shares?
Firm Expected Return Standard Deviation Percentage of portfolio Correlation
A 20% 40% 60% 0.2
B 10% 20% 40% 0.2
The answer to the question is available in the PDF file https://www.assignmentexpert.com/https://www.assignmentexpert.com/homework-answers/economics-answer-83945.pdf
Learn more about our help with Assignments: Finance