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A firm is financed with $17 billion in risk-free debt and $5 billion in risky equity. Its historical equity beta has been 1.6. If the

A firm is financed with $17 billion in risk-free debt and $5 billion in risky equity. Its historical equity beta has been 1.6. If the firm were to increase its leverage from $17 billion to $19 billion and use this cash to repurchase equity shares, what would you expect its new equity beta to be?

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