Pandit Swan Inc. (a major weapons manufacturer) has a capital structure with $6 billion in equity and $4 billion in debt. Its tax rate is .30; its levered beta is 1.8; the riskless rate is .02 and the expected equity risk premium is .06

What is its unlevered beta?

		1.23
		1.06
		1.16
		1.36
		none of the above

Pandit Swan Inc. (a major weapons manufacturer) has a capital structure with $6 billion in equity and $4 billion in debt. Its tax rate is .30; its levered beta is 1.8; the riskless rate is .02 and the expected equity risk premium is .06

The equation that describes the relationship between its levered beta and debt-equity ratio is

		L = 1.50+1.05B/S
		L = 1.06+0.74 B/S
		L = 1.23+0.86 B/S
		L = 1.36+0.95 B/S