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What is its levered beta

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Question - ABC Co. has a beta of 1.20. The firm currently has 30% debt, but is considering changing its capital structure to be 20% debt and 80% equity. If its corporate tax rate is 40%, what is its levered beta at 20% debt level? Hint: First calculate unlevered beta using old capital structure and then calculate levered beta using the new capital structure.

Reference no: EM132960100

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