Reefer System has a market capitalization of $ 1 billion and it will be buying Lyman Technology for $ 500 million, with a combination of $250 million in debt and $250 million in stock. You can assume that neither company had debt or cash prior to the transaction, and that the marginal tax rate for all companies is 40%. If Reefers beta prior to the transaction was 1.20 and Lymans beta was 0.90, estimate the beta in Reefers equity after the transaction.

Select one:

a. 1.10

b. 1.14

c. 1.23

d. 1.19

e. None of the above