$10$ pts

$18$

Question $22$

$10$ pts

General Systems, a computer manufacturer, announces that it will be acquiring FastWorks Software. You know the following $-$ General Systems had a levered beta of $1\mathrm{.}32$ prior to the merger. The firm has a market value of equity of $$13$ billion and $$16$ billion in debt outstanding.

FastWorks Software had a levered beta of $1\mathrm{.}49$ prior to the merger. The firm has a market value of equity of $$8\mathrm{.}00$ billion and $$7\mathrm{.}00$ billion in debt outstanding. Both firms have a $40\mathrm{.}00\%$Tax rate.

The $\frac{D}{E}$ ratio afteltiche merger is closest to

$1\mathrm{.}517$

$1\mathrm{.}146$

$1\mathrm{.}372$

$1\mathrm{.}269$

$1\mathrm{.}685$