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Evergreen's, a drug retailer, has a current debt-to-equity (D/E) ratio of 12%, and its current...

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Finance

Evergreen's, a drug retailer, has a current debt-to-equity (D/E) ratio of 12%, and its current equity beta is 0.8. The company plans to increase its D/E ratio to 62%. Assuming that Evergreen's debt beta is zero under both leverage scenarios, find the company's equity beta after the increase in leverage. Assume perfect markets and no taxes. Give the answer with two decimals; e.g., 1.23 (Acceptable error = 0.05).

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