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ESTIMATING THE UNLEVERED BETA The CFO of Sterling Chemical is interested in evaluating the cost of equity capital for his firm. However, Sterling uses very

ESTIMATING THE UNLEVERED BETA The CFO of Sterling Chemical is interested in evaluating the cost of equity capital for his firm. However, Sterling uses very little debt in its capital structure (the firm's debt-to-equity capitalization ratio is only 20%), while larger chemical firms use substantially higher amounts of debt. The following table shows the levered equit

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