You have been asked to assess the beta for AT&T after it acquires Media The following table summarizes the two firms current values:

AT & T plans to borrow $ 25 billion and use $ 35 billion in new equity to buy Media One shares. It will assume Media Ones existing debt. Estimate the beta for AT&T after the acquisition.

	AT & T	Media One
Beta (Based on Regression over last 5 years)	0.92	1.40
Average D/E Ratio over last 5 years	12%	25%
Current Market Value of Equity	$ 240 Billion	$ 60 billion
Current Market Value of Debt	$ 60 Billion	$ 40 billion
Tax Rate	40%	40%

AT & T plans to borrow $ 25 billion and use $ 35 billion in new equity to buy Media One shares. It will assume Media Ones existing debt. Estimate the beta for AT&T after the acquisition.

1.09

1.45

1.15

1.21

Hint, it is not 1.09%