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What is the beta for a firm with 60% equity and 40% debt if a similar firm with 55% equity and 45% debt has a

What is the beta for a firm with 60% equity and 40% debt if a similar firm with 55% equity and 45% debt has a levered beta of 1.3? The corporate tax rate is 40%.

  1. 1.40
  2. 2.41
  3. 1.66
  4. 1.22
  5. 0.88

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