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Calculate levered beta using the new capital structure

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Reference no: EM131892147

Brandi Co. has a beta of 1.20. The firm currently has 30% debt, but is considering changing its capital structure to be 20% debt and 80% equity. If its corporate tax rate is 40%, what is Brandi's levered beta at 20% debt level?

Hint: First calculate unlevered beta using old capital structure and then calculate levered beta using the new capital structure.

Reference no: EM131892147

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