After the recapitalization

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Langley Longboards has $10 million in total assets with a debt to capital ratio of 0.20. Langley’s beta is currently 1.35, and its tax rate is 40%. Langley is considering retiring all of their debt to eliminate their financial risk, after the recapitalization (not changing total assets), what would the firm’s new beta be?

Reference no: EM131078135

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