ABC, Inc. has $20 million in debt outstanding at a cost of 8%. It also has 2 million shares outstanding with stock price is $15 per share. Its dividend payout ratio is 100%. The firm’s total (federal-plus-state) tax rate is 40%. ABC has a beta of 1.0. The market risk premium is 4%, and the risk-free rate is 6%. What is ABC’s unlevered beta? Use market value debt-to-equity ratio when unlevering.

Group of answer choices

0.870

0.714

0.833

0.769