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What is the new levered beta for tji

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Reference no: EM132809855

Problem 1: Maxwell Publications (MP) had a beta of .76 prior to its purchase of Technical Journals, Inc.(TJI), which had a pre-merger beta of 2.15. If TJI had $367 million in equity and $759 million in debt before the merger, and the company was purchased for $600 million in cash plus assumption of existing debt, what is the new levered beta for TJI?

a. Insufficient Information.
b. No change in beta; the debt remains the same.
c. 1.59
d. 1.25
e. 2.61

Reference no: EM132809855

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