4-5. Currently, Hotel California has no debt (i.e., leverage=0). The CEO of Hotel California considers increasing leverage (=debt/(debt+equity)) 0.8. Currently, Hotel California's CAPM beta is 1.0. The cost of debt (R_D) will be 10%, riskfree rate (R_F) is 1%, and market return (R_M) is 11%. Assume that the corporate tax rate (t) is ZERO. Your task, as the CFO of Hotel California, is to provide the cost of capital under this proposed capital structure li.e., 80% leverage). 4. What is the CAPM beta under the proposed capital structure fi.e,80% leverage)? A. 1.0 B. 2.0 C. 3.0 D. 4.0 E. 5.0 5. What is the weighted average cost of capital under the proposed capital structure (i.e., 80% leverage)? A. 16.9% B. 17.5% C. 18.2% D. 19.496 E. 20.1%