Question 3: As an independent public company, the Bauxite Division will have the same tax rate and capitalization ratios as OMCs. However, it is anticipated that the Bauxite Divisions Cost of Debt will be 0.25% higher than OMCs. Below is a financial snapshot for OMC:

Based upon this information and the Asset Beta you have already calculated, what is the expected Equity Beta for the Bauxite Division?

\begin{tabular}{|l|c|} \hline Omicron Corporation (OMC) & 2023 \\ \hline & \\ \hline Corporate Tax Rate: & 40.00% \\ \hline Equity Ratio: & 65.00% \\ \hline Credit Spread (Corporate): & 2.25% \\ \hline \end{tabular}