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Please, I need help: Castle Inc. currently has $50 million in debt and $100 million in equity outstanding. Its stock has a beta (levered) of

Please, I need help:

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Castle Inc. currently has $50 million in debt and $100 million in equity outstanding. Its stock has a beta (levered) of 1.2. It is planning a leveraged buyout (LBO), where it will increase its debt-to- equity ratio to 5. If the tax rate is 40%, what will the new levered beta be after the LBO? A. 0.92 B. 2.15 C. 3.68 D. 5.35

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