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Homework answers / question archive / Checkers, a computer manufacturer, announces that it will be acquiring Hadara Software
Checkers, a computer manufacturer, announces that it will be acquiring Hadara Software. You know the following: Checkers had a beta of 1 prior to the merger. The firm has a market value of equity of $ 12 billion and $ 4 billion in debt outstanding. Hadara Software had a beta of 1.1 prior to the merger. The firm has a market value of equlty of $ 6 billion and $2 billion in debt outstanding. Note: Checkers had bought Hadara with all debt, both firms have a 40% tax rate,T-bond rate 0.05 and the equity risk premlum is 0.053.
Please write your answers in decimals,
What is the unlevered beta for Checkers?
What is the unlevered beta for Hadara?
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