medium · Private Equity value-creation
A practitioner is calculating WACC for a private company. Comparable public companies have an average levered beta (β_L) of $1.20, a debt-to-equity ratio (D/E) of $0.50, and a tax rate of 25%. The target company will have a D/E of $1.50.
What is the target's re-levered beta?
- 0.81
- $1.71
- 2.40
- 1.20
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