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Calculate the beta of cmr shares

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CMR has no debt. The stock's beta is 1.5 and its expected profitability, RE, is 15%. The company decides to go into debt at the risk-free rate, Rf, of 5% to buy back 50% of its shares. Capital markets are supposed to be perfect.

Calculate the beta of CMR shares after the repurchase transaction.

Reference no: EM133113695

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