ABC Corp. currently uses no debt and its beta is 1.20.  Further, ABC’s CFO is co

ABC Corp. currently uses no debt and its beta is 1.20.  Further, ABC’s CFO is considering moving to a capital structure with 40% debt. Assume the company’s current ROE is 10.0%,  its tax rate is 35.0%, the risk free rate and equity risk premium are currently 4.0% and 6.5%, respectively.  What would its levered beta be if this revised capital structure were adopted? 

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