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The managers of the Woodford Co. are considering increasing the amount of debt in their capital structure. The firms current market-based debt-to-asset ratio is 28%,

The managers of the Woodford Co. are considering increasing the amount of debt in their capital structure. The firms current market-based debt-to-asset ratio is 28%, its beta is 0.76, and the marginal tax rate is the statutory 21%. If the firm increases its debt-to-asset ratio to 62%, use the Hamada Relationship to estimate the firms beta at the new capital structure.

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