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Simpson Inc. is considering a vertical merger with The Lachey Company. Simpson currently has a required return of 1 0 % , while Lachey's required
Simpson Inc. is considering a vertical merger with The Lachey Company. Simpson currently has a required return of while Lachey's required return is The market risk premium is and the riskfree rate is Assume the market is in equilibrium. If Simpson is going to make up of the new firm and Lachey will comprise the remaining what will be the beta of the new merged firm? There will be no additional infusion of debt in the merger.
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