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El Capitan Foods has a capital structure of 45% debt and 55% equity, its tax rate is 25%, and its beta (levered up with debt)
El Capitan Foods has a capital structure of 45% debt and 55% equity, its tax rate is 25%, and its beta (levered up with debt) is 1.20. What would the firm's beta be if it used no debt, i.e., what is its unlevered beta, bu? (Hint: Use the Hamada equitation to determine unlevered beta, similar to homework 13-4) O 0.58 O 0.86 O 0.74 O 0.95 O 0.77
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