題組內容

1.George Inc. and Mary Inc. have identical equity betas of 1.5 if both were all equity financed.
618334f7464fe.jpgThe market value information for each company is shown in the following.

(3) (5%) Please discuss the source of the difference of the required rate of return on equity holders between two companies. Note: The answer for this sub-question should be written wihin 5 lines. Any information exceeds 5 lines will not be graded.