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Your firm uses 50% debt financing and 50% equity financing. The beta of the debt is 0 since the firm has more

than enough cash reserves to retire the debt completely. An identical firm that is entirely equity -financed has a market beta of 1.2. What is your firmʹs equity market beta?

A) 0.7

B) 0.6

C) 2.4

D) 1.8

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