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Business, 07.04.2020 21:36 jordanjones022

Obsession Inc. is a publicly traded company with two business lines: perfumes and apparel. The beta of this company is 1.72. Obsession Inc. is contemplating a major restructuring in which it wants to sell off its apparel division, which has an unlevered beta of 0.71, for 20 million. It also wants to borrow an additional 25 million and buy back stock worth 45 million. After the sale of the division and the share repurchase, Obsession Inc. will have 46 million in debt and 143 million in equity outstanding. Assume a tax rate of 40.00% percent. The unlevered beta of the perfume division isa.46 mn and 143 mn
b.21 mn and 188 mn
c.71 mn and 143 mn
d.46 mn and 188 mn
e.71 mn and 143 mn

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Obsession Inc. is a publicly traded company with two business lines: perfumes and apparel. The beta...
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