1. Mass Co. has a beta of 1.20. The firm currently has 30% debt, but is considering changing its capital structure to be 20% debt and 80% equity. If its corporate tax rate is 40%, what is its levered beta at 20% debt level?

   Hint: First calculate unlevered beta using old capital structure and then calculate levered beta using the new capital structure.

   	a.	1.01
   	b.	1.19
   	c.	1.10
   	d.	0.91
   	e.	1.75