24. Currently Facebook has equity of $576 billion and debt of $8 billion. The current beta of Facebook stock is 1.06. The tax rate for Facebook is 21%. The current risk-free rate is 1.59%. What is the new equity beta if Facebook buys back $300 billion worth of equity by issuing additional S300 billion of debt? (rounded to two digits) a. 1.86 b. 1.97 c. 1.99 d. 2.21 e. 2.24 (For the next two questions) A firm currently has equity of $6 billion and debt of $2 billion. The current EBIT is equal to $300 million, and the current rating of the firm is AA. The current Treasury yield is 1.5%. Assume a zero tax rate. Suppose that the mapping between interest coverage ratio, credit rating, and credit spread is as follows: Interest coverage ratio is Rating is AAA AA BBB Credit Spread (Interest Rate - Treasury Yield) 0.40% 0.70% 1.00% 2.00% 4.00% 6.50% 8.75% 9.50% 10.50% 12.00% > 8.5 6.5 - 8.5 4.25 -6.5 2.5 - 4.25 1.75 -2.5 1.5 - 1.75 0.8 -1.5 0.65 -0.8 0.2 -0.65