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The managers of the Woodford Co. are considering increasing the amount of debt in their capital structure. The fiem's current market-based debe-to-isset ratio is 38%,

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The managers of the Woodford Co. are considering increasing the amount of debt in their capital structure. The fiem's current market-based debe-to-isset ratio is 38%, its beta is 0.76 , and the marginal tax rate is the statutory 21%. If the firm increases its deht-to-asset ratio to 58%, use the Hamada Relationship to estimate the frem's beta at the new capital structure. 0.61 0.85 1.59) 107 0.58

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