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South is an all - equity firm and has a market value of 1 0 0 million. The equity beta is equal to . 5

South is an all-equity firm and has a market value of 100million. The equity beta is equal to .50. The management of the company plans to change the capital structure by issuing 40million in risk-free debt and use these 40million plus 10million in cash to repurchase shares. What will be the equity beta after the transaction? Assume perfect capital markets.

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