Question 5 Max Co. has a Beta of 1.25, debt-to-equity ratio of 0.3 and tax rate of 35%. The company repurchases some of its own stock using cash, and debt-to-equity ratio increases to 0.4. What is the new Beta after the stock repurchase (Hint: un-lever the beta first, then re-lever based on the new debt-to-equity ratio)? 1.32 1.00 1.35 1.05