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ABC software is trying to establish its optimal capital structure. It currently has 30% debt and 70% equity. However, the firm CEO believes that the

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ABC software is trying to establish its optimal capital structure. It currently has 30% debt and 70% equity. However, the firm CEO believes that the firm should use more debt. The risk-free rate is 3% and the market risk premium is 5%. The firm's tax rate is 35% and the cost of equity is 10%, as determined by the CAPM. Assume that the firm changed its capital structure to 40% debt and 60% equity. How much should be the firm's unlevered stock beta? Enter your answer in the following format: 1.23; Hint #1: Answer is between 0.9 and 1.27

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