Questions $2$ through $6$ are some of the intermediate steps required to answer this question. Please refer to the example we did in class if you have questions.

You run a regression of monthly returns of Mapco, an oil$-$ and gas$-$producing firm, on the S&P $500$ Index and come up with the following output for the period $1991$ to $1995.$

Intercept of the regression $=0\mathrm{.}380\%$; X$-$coefficient of the regression $=0\mathrm{.}55$; Standard error of X$-$coefficient $=0\mathrm{.}2$; R$2=55\mathrm{.}0\%$

There are $18\mathrm{.}00$ million shares outstanding, and the current market price is $$6\mathrm{.}00/$share$.$ The firm has $$20\mathrm{.}00$million in debt outstanding. The firm has a tax rate of $40\mathrm{.}00\%$ percent.

Assume now that Mapco has three divisions. It plans to divest itself of one of the divisions for $$22\mathrm{.}00$ million in cash and acquire another for $$67\mathrm{.}00$ million $($it will borrow $$45\mathrm{.}00$ million to complete this acquisition$).$ The division it is divesting is in a business line where the average unlevered beta is $0\mathrm{.}35,$ and the division it is acquiring is in a business line where the average unlevered beta is $0\mathrm{.}88.$ What will the beta of Mapco be after this acquisition?

Unlevered beta of Mapco before restructuring?

Unlevered beta of Mapco before restructuring?