Calculating levered beta
7. If Hilgart Inc. had no debt in its capital structure, its unlevered beta would be 0.75. However, the firm’s capital structure consists of 55% debt and 45% equity and it has a corporate tax rate of 40%. What is Duffert’s levered beta?
a. 0.885
b. 0.950
c. 1.100
d. 1.300
e. 1.450
