A firm has debt beta of 0.20 and an equity beta of 3.18. If the debt-value (D/V) ratio is 42%, what is the unlevered equity beta? Assume continuous leverage rebalancing. a. 1.93 b. 2.42 c. 2.63 d. 3.18

The table below shows a book balance sheet for Wellman Enterprises, LLC. The company's long-term debt is for mortgaged oil fields, but it also uses short-term bank loans as a permanent source of financing. It pays 11% interest on the bank debt and 9% interest on the secured debt. Wellman has 10 million shares of stock outstanding, trading at $89 per share. The expected return on Wellman's common stock is 22%.

$ Millions
Accounts receivable	500	Accounts payable	180
Inventory	50	Bank loan	310
Current assets	550	Current liabilities	490
Real estate	2,600	Long-term debt	2,400
Other assets	140	Equity	400
Assets	3,290	Liab & Equity	3,290

Calculate Wishing Well's after-tax WACC. Assume that the book and market values of Wishing Well's debt are the same and the marginal tax rate is 35%.

	a.	9.95%
	b.	9.45%
	c.	8.30%
	d.	11.84%