Question: Robins Rockets currently has a term loan. Because it can be called at any time it is booked as a current liability. The debt carries

Robins Rockets currently has a term loan. Because it can be called at any time it is booked as a current liability. The debt carries with it a cost of prime plus 4%. Robins Rockets is public and so there is a calculated beta of 1.4. Robin the controlling shareholder is getting tired of fighting with the minority shareholders about her vision for the company though and is thinking about going private. What would the Beta be? Would you suggest this approach?

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