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ESTA Inc. has a beta of 2, the market value of equity of $50M and the market value of assets of $83M. ESTA is considering

ESTA Inc. has a beta of 2, the market value of equity of $50M and the market value of assets of $83M. ESTA is considering acquiring another company. The target company beta is 1.2, the market value of equity is $20M, and the market value of debt is $80M. What will be the beta of the merged firm?

A. 1.3

B. 1.4

C. 1.5

D. 1.6

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