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ABC Corp. currently uses no debt and itsbeta is 1.20. Further,ABC's CFO is considering moving to a capital structure with 40% debt. Assume the company'scurrent

ABC Corp. currently uses no debt and itsbeta is 1.20. Further,ABC's CFO is considering moving to a capital structure with 40% debt. Assume the company'scurrent ROE is 10.0%, its tax rate is 35.0%, the risk free rate and equity risk premium are currently 4.0% and 6.5%, respectively. What would its levered betabe if this revised capital structurewere adopted?

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