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Quest Inc. has no debt. Its beta is 1.70, the risk-free rate is 4%, market risk premium is 10%, its tax rate is 35%. If
Quest Inc. has no debt. Its beta is 1.70, the risk-free rate is 4%, market risk premium is 10%, its tax rate is 35%. If Quest were to recapitalize to 17% debt, it would value debt at a rate of 14% and use the proceeds to repurchase stock. Find the value of Quest's beta if it recapitalizes.
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