QUESTION 4 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 OBL = 1.50+1.05B/S BL = 1.36+0.95 B/S BL = 1.06+0.74 B/S O BL = 1.23+0.86 B/S