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Company Risk Pusher currently has debt that accounts for 50% of its total capital source and the company's original unleveraged beta is 0.97 (before the
Company Risk Pusher currently has debt that accounts for 50% of its total capital source and the company's original unleveraged beta is 0.97 (before the company borrowed any debt). The company pays 40% tax.
If the company decides to borrow more debt resulting in its total debt becoming 59.0% of total capital, how much riskier will the company become, measured by percentage increase in its beta?
Note: keep two decimal points in your answer and only type the percentage points into the answer box. Type the % sign into the unit box.
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