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X is a company operating in the entertainment software business and you are trying to estimate a beta for just being in this business. The

X is a company operating in the entertainment software business and you are trying to estimate a beta for just being in this business. The average regression beta across 49 entertainment software companies is 1.38. The average D/E ratio for these firms is 25% and cash as a percent of firm value is 20%. What is the unlevered beta assuming a marginal tax rate of 40%?

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