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ABC Company has a capital structure of 40% debt and 60% equity, its tax rate is 40%, and its beta (leveraged) is 1.12 . Based

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ABC Company has a capital structure of 40% debt and 60% equity, its tax rate is 40%, and its beta (leveraged) is 1.12 . Based on the Hamada equation, what would the firm's beta if it used no debt, i.e. what is its unleveraged beta? Select one: a. 0.72 b. 0.83 c. 0.75 d. 0.80 ABC Company has a debt-equity ratio (D/E) of 0.8 , and its current leveraged beta (L) is 1.406 . Tax rate is 40%. If the company changes its debt-equity ratio to 0.6 , what would be ABC Company's new leveraged beta (L) ? Select one: a. 1.125 b. 1.382 c. 1.194 d. 1.292

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