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Business, 18.03.2021 01:30 thestarlexyp32wpj

Southwestern Bell, a phone company, is considering expanding its operations into the media business. The beta for the company at the end of 2010 was 0.90, and the debt/equity ratio was 1. The media business is expected to be 30 percent of the overall firm value in 2016, and the average beta of comparable firms is 1.20; the average debt/equity ratio for these firms is 50 percent. Estimate the beta for Southwestern Bell in 2016, assuming that it maintains its current debt/equity ratio of 1. Assume a 36% tax rate. Group of answer choices

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