A company is estimating its optimal capital structure. Now the company has a capital structure that consists of 50% debt and 50% equity, based on market values (debt to equity D/S ratio is 1.0). The risk-free rate (r_RF) is 3.5% and the market risk premium (r_M r_RF) is 5%. Currently the companys cost of equity, which is based on the CAPM, is 13.5% and its tax rate is 30%. Find the firms current leveraged beta using the CAPM

		2.0
		1.6
		2.5
		1.9