Air Tampa has just been incorporated, and its board of directors is currently grapplingwith the question of optimal capital structure. The company plans to offer commuter airservices between Tampa and smaller surrounding cities. Jaxair has been around for a fewyears, and it has about the same business risk as Air Tampa would have. Jaxairs market-determined beta is 1.8, and it has a current market value debt ratio (total debt/total assets)of 50% and a federal-plus-state tax rate of 40%. Air Tampa expects only to bemarginally profitable at start-up; hence its tax rate would only be 25%. Air Tampasowners expect that the total book and market value of the firms stock, if it uses zerodebt, would be $10 million. Air Tampas CFO believes that the MM and Hamadaformulas for the value of a levered firm and the levered firms cost of capital should beused.a) Estimate the beta of an unlevered firm in the commuter airline business based on