N120 e note The equity beta of a levered firm is 1.2. The beta of debt is 0.2. The firm's market value of debt is $50 million and market value of equity is $100 million. On the balance sheet, the value of debt is $50 million and the value of equity is $30 million. 86 a. What is the asset beta if the tax rate is zero? (1) 90 Answer b, what is the company s cost of capital if the risk-free rate is 2% and market risk premium is 5% (0.5) 98 Answer Intr PM 32:10 12/4/2017 ENG 904a)^ SONY