Consider the following information regarding corporate bonds:

Rating AAA AA A BBB BB B CCC

Average Default Rate 0.0% 0.0% 0,2% 0,4% 2.1% 5.2% 9.9%

Recession Default Rate 0.0% 1.0% 3.0% 3.0% 8.0% 16.0% 43.0%

Average Beta 0.05 0.05 0.05 0.10 0.17 0.26 0.31

Company Market Capitalisation ($mm) Total Enterprise Value ($mm) Equity Beta Debt Rating

Taggart Transcontinental $4,500 8,000 1.1 BBB

Rearden Metal $3,800 7,200 1.3 AAA

Wyatt Oil $2,400 3,800 0.9 A

Nielson Motors $1,500 4,400 1.75 BB

Your estimate of the asset beta for Taggart Transcontinental is closest to:

a 0.66

b 0.71

c 0.59

d 0.42