Question: An analyst is evaluating an offer for an equity stake in a private insurer. She uses Alleghany Company as it s closest public comparable. Alleghany

An analyst is evaluating an offer for an equity stake in a private insurer. She uses Alleghany Company as it s closest public comparable. Alleghany has a Beta of 0.70 and has no debt in its capital structure. The private insurer the analyst is analyzing is funded 20% by debt. What is the estimated beta for the private insurer? (please show work)

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