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A merged firm would have a beta that is a simple average of two firm's betas, and that would result in a cost of equity

A merged firm would have a beta that is a simple average of two firm's betas, and that would result in a cost of equity that is an average of the two firms' costs of equity. With the assumption that the two firms are financed only with equity, their WACCs could also be averaged to find the merged firm's WACC.
(a) True
(b) False

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