Beta of equity in the firm be after the leveraged buyout

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Reference no: EM13953668

Safecorp, which owns and operates grocery stores across the United States, currently has $50 million in debt and $100 million in equity outstanding. Its stock has a beta of 1.2. It is planning a leveraged buyout, where it will increase its debt/equity ratio of 8. If the tax rate is 40 percent, what will the beta of the equity in the firm be after the leveraged buyout?

Reference no: EM13953668

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