QUESTION 4 Pandit Swan Inc. (a major weapons manufacturer) has a capital structure with $10 billion in equity and $6 billion in debt. Its tax rate is.30; its levered beta is 1.5: 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 O BL = 1.5+1.05 B/S BL = 1.06+0.74 B/S BL = 1.36+0.95 B/S O O BL = 1+0.8B/S