Suppose BetLev Inc. has a capital structure with 63 percent debt and 37 percent equity,...
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Suppose BetLev Inc. has a capital structure with 63 percent debt and 37 percent equity, a (levered) beta of 1.3 , and a corporate tax rate of 30 percent. Estimate the unlevered beta of BetLev. Now suppose BetLev wishes to have a target capital structure of 46 percent debt and 54 percent equity. What will be its levered beta at the target capital structure?
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