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Penguin Publishing is exploring adding more debt to its capital structure. Currently, the company is 8 0 % equity financed and 2 0 % debt
Penguin Publishing is exploring adding more debt to its capital structure. Currently, the company is equity financed and debt financed. Additionally, its equity beta is and debt beta is Their CEO wants to change to equity and the rest will be debt. The CEO plans to maintain a constant DE ratio for the long term. If they do not expect their debt beta to change, what do you expect their equity beta to be under the new capital structure?
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