Anacott Steel is acquiring Terafly Incorporated. Terafly is expected to provide Anacott with operating cash flows of $12, $21, $16, and $9 million over the next four years, respectively. In addition, the horizon value of all remaining cash flows will grow at a rate of 6% growth . The merger will cost Anacott $43 million today

Anacot has a required return of 8.00%, while Terafly has a required return is 17.00%. The market risk premium is 5.20% and the risk-free rate is 5%. Assume the market is in equilibrium. If Anacot is going to make up 67% of the new firm (and Terafly will comprise the remaining 33%), what will be the beta of the newly merged firm? What is the required return using the beta of the combined firm.?