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You want to estimate the equity beta of Chrysler, a private auto maker. You estimate the asset beta of the auto industry to be 1.34.

You want to estimate the equity beta of Chrysler, a private auto maker. You estimate the asset beta of the auto industry to be 1.34. Chrysler has a D/E ratio of 1.5 and marginal tax rate of 21%. What is the equity beta of Chrysler?

		1.34
		2.84
		2.50
		2.93
		4.12

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