Of the two divisions of equal size (in market value terms), NZ Construction Incorporation plans to sell its residential house division for $30 million in cash and acquire another more exotic/emerging division for $54 million (It will borrow $30 million to complete this acquisition). The division it is selling is in a business line where the average unlevered beta is 1.20, and the division it is acquiring is in a business line where the average unlevered beta is 1.50. The current levered beta of the company is 1.5. The firm currently has $60 million in debt outstanding. The relevant corporate tax rate is 28%.

Required

A. What is the current unlevered beta of the company (before divestiture)?

B. What is the unlevered beta of the remaining business after divestiture?

C. What is the new unlevered beta of the company after acquisition?

D. What is the new levered beta of the company after acquisition?