1. Maxwell Publications (MP) had a beta of .76 prior to its purchase of Technical Journals, Inc.(TJI), which had a pre-merger beta of 2.15. If TJI had $367 million in equity and $759 million in debt before the merger, and the company was purchased for $600 million in cash plus assumption of existing debt, what is the new levered beta for TJI?
   1. Insufficient Information.
   2. No change in beta; the debt remains the same.
   3. 1.59
   4. 1.25
   5. 2.61
2. A company has a dividend payout ratio of 35% and a return on equity of 14.3%. What is its current sustainable growth rate?