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7. An all-equity company decides to recapitalize. The company has an unlevered beta of 1.7. If the company starts to borrow with 40% debt ratio,

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7. An all-equity company decides to recapitalize. The company has an unlevered beta of 1.7. If the company starts to borrow with 40% debt ratio, what will be the levered beta using Hamada's equation if the tax rate =21% ? Why is the levered beta higher than the unlevered beta

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