QUESTION $4.[3$ points$]$ Currently, Hotel $x$ has no debt $($i$.$e$.,$ leverage $=0).$ The CEO of Hotel $x$ considers increasing

leverage $(=$debt$/($debt$+$equity$))0\mathrm{.}8.$ Currently, Hotel X$\text{'}$s CAPM beta is $1\mathrm{.}0.$ The cost of debt $(R_D)$ will be $10\%,$

riskfree rate $(R_F)$ is $1\%,$ and market return $(R_M)$ is $11\%.$ Assume that the corporate tax rate $()$ is ZERO. Your task,

as the CFO of Hotel X$,$ is to provide the cost of capital under this proposed capital structure $($i$.$e$.,80\%$ leverage$).$

$4-1.$ The beta of debt is $($

$4-2.$ What is the cost of capital under the proposed capital structure $($i$.$e$.,80\%$ leverage$)?$

$4-3.$ According to Modigliani$-$Miller's propositions $($under the required assumptions$).$ what is the optimal level of

leverage that maximize the Hotel X$\text{'}$s value?