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Globex Corp. has a capital structure that consists of 35% debt and 65% equity. The firms current beta is 1.25, but management wants to understand

Globex Corp. has a capital structure that consists of 35% debt and 65% equity. The firms current beta is 1.25, but management wants to understand Globex Corp.s market risk without the effect of leverage.

If Globex Corp. has a 25% tax rate, what is its unlevered beta?

a.0.76

b. 0.85

c. 1.07

d. 0.89

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