Company XYZ BALANCE SHEET 2018 ASSETS Cash Acconts Receivable Inventory Total Current Assets $ $ $ $ 2016 938 $ 9,745 $ 7,968 $ 18,651 $ 2017 1,070 $ 11,531 $ 9,455 $ 22,056 $ 1,248 $ 13,640 $ 11,020 $ 25,908$ 2019 1,471 15,686 12,673 29,830 905 Land Buildings Less: Accumulated Depreciation Total Assets $ $ $ $ 905 $ 4,015 $ 700 $ 22,871 $ 905 $ 4,713 $ 857 $ 26,817 $ 905 $ 5,450 $ 1,039 $ 31,224 $ 5,580 1,225 35,090 Average Proportion Rate Adj Rate Weighted LIABILITIES AND EQUITY Accounts Payable Taxes Payable Total Current Liabilities $ $ $ 13,503 $ 638 $ 14,142 $ 16,360 $ 770 $ 17,130 $ 19,356 $ 948 $ 20,305 $ 21,419 1,171 22,590 $ 4,851 46.38% 9.00% 7.2% 3.34% Long-Term Debt Total Liabilities $ $ 5,315 $ 19,457 $ 5,016 $ 22,146 $ 4,702 $ 25,007 $ 4,371 26,961 Common stock Retained earnings Total Equity $ $ $ 1,273 $ 2,141 $ 3,414 $ 1,273 $ 3,398 $ 4,671 $ 1,273 $ 4,944 $ 6,217 $ 1,273 6,856 8,129 15.8% 15.8% $ 5,608 $ 10,459 53.62% 100.00% 8.48% 11.82% WACC $ 1,236.69 cost of cpaital in dollars Total Liabilities and Equity $ 22,871 $ 26,817 $ 31,224 $ 35,090 0.75 1.27 Information Given: Unlevered Beta Levered Beta Long-Term Debt Interest Rate Income Tax Rate T-bill Rate S&P 500 Rate 9.00% 20.0% 2.5% 13.0% CAPM (rate Investors Expect T-Bill Rate S&P 500 Rate EMRP (Spread) Levered Beta CAPM risk free rate +(Beta * EMRP) 2.5% 13.0% 10.5% Equity Market risk premium 1.27 15.8% $ $ Calculations: Average Debt Average Equity Levered Beta EMRP CAPM 4,851 5,608 1.27 10.5% 15.8% Company XYZ has an unlevered Beta of 0.60 Company XYZ has average debt of $550,000 and average equity of $350,000. Its income tax rate is 30.0%. Calculate the levered beta of the company. (Only input the number and use 2 decimals. For example a Beta of 1.99 would be input 1.99.)