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Company B has an equity Beta of 1.3. However, it recently bought a company which accounts for 20% of its value which has a beta

Company B has an equity Beta of 1.3. However, it recently bought a company which accounts for 20% of its value which has a beta of 1.4. This company is financed by 40% debt and 60% equity.

a) The proxy asset beta for Company B is 0.758. Demonstrate how this is calculated

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