Columbia Gas Company (CGC) is a publicly listed company with a current share price of

$25 per share. CGC has 33 million shares outstanding and $100 million in long-term debt. CGCs long-term debt consists of bonds issued with a face value of $100 million with 10 years to maturity with annual coupon rate of 11% (APR). The long-term bonds are currently trading at par value.

Columbia Gas Company (CGC) has a standard deviation of 36% and a correlation with the market of 0.85. Assume the risk-free rate is 4% and the market portfolio has an expected return of 13% and a standard deviation of 22%. The corporate tax rate is 30%.

Question: Calculate CGCs beta with the market and CGC's cost of equity.