Cans ASA has a debt ratio of 0.5 . The company's investment beta is 1.1 , while stock beta is 1.5 . Risk free rate is 4 % , and expected return on markedsportfolio is 10%. Disregard tax .
( a) What is the systematic risk for the company's debts ?
( b ) What is the cost of capital to debt ?
( c) What does it mean that the debt has a beta value greater than zero ?