In order to estimate the beta of a private firm, named Z Ltd., that manufacture motors. Z Ltd firm has a debt equity ratio of 25% and faces a tax rate of 40% which is same for all publicly traded firms as well. You have managed to get betas for publicly traded firms that also manufacture motors. The following data in the sector for firms: Firm Beta Debt (in million Rs) MV of Equity (in milion Rs) A 1.4 2500 3000 B 1.2 5 200 C 1.2 540 2250 D 8 300 E 1.5 2900 4000 (a) Estimate the levered beta for Z Ltd. [4 Marks] (b) What concerns, if any, would you have about using betas of comparable firms? (answer not more than 50 words) 0.7