Question: Safecorp which owns and operates grocery stores across the United
Safecorp, which owns and operates grocery stores across the United States, currently has $50 million in debt and $100 million in equity outstanding. Its stock has a beta of 1.2. It is planning a leveraged buyout, where it will increase its debt-to-equity ratio of 8. If the tax rate is 40%, what will the beta of the equity in the firm be after the leveraged buyout?
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