General Systems, a computer manufacturer, announces that it will be acquiring FastWorks

Software. You know the following:

General Systems had a beta of $1\mathrm{.}25$ before the merger. The firm has a market value of equity

of $$15$ billion and $$4$ billion in debt outstanding.

FastWorks Software had a beta of $1\mathrm{.}4$ before the merger. The firm has a market value of equity

of $$6$ billion and $$2$ billion in debt outstanding.

Both firms have a $40\%$ tax rate.

Estimate the business risk $($unlevered beta$)$ for General Systems before acquisition.

Estimate the business risk $($unlevered beta$)$ for FastWorks Software before acquisition.

Estimate the business risk $($unlevered beta$)$ for the combined firm $($after the acquisition$).$

If General Systems acquired FastWorks Software by issuing $40\%$ debt and $60\%$ equity capital.

Estimate the levered beta for the combined firm.