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Bailey and Brothers has a levered beta of 1.20, its capital structure consists of 40% debt and 60% equity, and its tax rate is 40%.

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Bailey and Brothers has a levered beta of 1.20, its capital structure consists of 40% debt and 60% equity, and its tax rate is 40%. What would Bailey's beta be if it used no debt, i.e., what is its unlevered beta? 0.74 1.10 0.86 0.92 0.69

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