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Your firm has a debt-to-asset ratio of 30% and a beta of 0.89. The firm faces a corporate tax rate of 35%. You are considering
Your firm has a debt-to-asset ratio of 30% and a beta of 0.89. The firm faces a corporate tax rate of 35%. You are considering a recapitalization to increase the debt-to-asset ratio to 58%. Use the Hamada Relationship to estimate the betas of the unlevered firm and at the new higher-debt capital structure. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 0.87.) What is the unlevered beta? What is the beta at the new capital structure
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