By regression analysis using stock return data, the raw beta is estimated to be 1.4. The debt to equity (D/E) ratio has been 0.6. However, the firm will change the D/E to the target 0.9. What would be the equity beta (levered beta) under the target D/E ratio? Tax rate is 35%.

a) greater than 1.55 but less than 1.65 C) greater than 1.65

b) less than 1.4 d) greater than 1.44 but less than 1.55