Morris Industries has a capital structure of 55 percent common shares, 10 percent preference shares, and 45 percent debt. The firm has a 60 percent...

Morris Industries has a capital structure of 55 percent common shares, 10 percent preference shares, and 45 percent debt. The firm has a 60 percent dividend payout ratio, a beta of 0.89, and a tax rate of 38 percent. Given this, which one of the following statements is correct