AIPEC Enterprises operates in two businesses: it gets $100 million in revenues from food processing and $70 million in revenues from chemicals. You have the following information on the two businesses:

Unlevered Beta FIRM VALUE/Sales

Food 0.50 1.35

Chemicals 1.20 1.4

If AIPEC Enterprises has a debt to equity ratio of 66.67%, estimate the levered beta for AIPEC. (Marginal tax rate is 40%)

Select one:

a. 1.11

b. 1.33

c. 1.40

d. 1.85

e. 1.20

f. 1.35