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What is the beta of the firm after the merger? You are examining a firm after a proposed merger takes place with the information provided:

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You are examining a firm after a proposed merger takes place with the information provided: $ in millions Acquiring Company Target Company Book Value Assets 8,200 1,400 Book Value Equity 3,526 882 Book Value Market Value Debt Equity 3,034 6,232 182 2,408 Enterprise Value 9,266 2,590 The betas of the acquiring and target companies are 0.953 and 1.364, respectively. What is the beta of the firm after the merger? i) 1.01 ii) 1.04 iii) 0.98 iv) 1.07

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