The CFO of ABC is interested in evaluating the cost of equity capital for his firm. However, ABC uses very little debt in its capital structure $($the firm$$s debt$-$to$-$equity capitalization ratio is only $25\%),$ while larger firms in the same industry use substantially higher amounts of debt. The tax rate is $30\%.$ The following information shows the levered equity betas, debt$-$to$-$equity ratios, and debt betas for three of the largest firms in the same industry. Assume the debt beta of $0\mathrm{.}1.$ Please use two decimals in your answer.

Company $1$: Levered equity beta of $1\mathrm{.}2$; Debt$/$Equity ratio of $50\%.$

Company $2$: Levered equity beta of $1\mathrm{.}4$; Debt$/$Equity ratio of $70\%.$

Company $3$: Levered equity beta of $1\mathrm{.}1$; Debt$/$Equity ratio of $30\%.$

Practitioners have generally assumed that the debt beta is:

A$.$

$50\%$ of the equity beta

B$.$

$0$

C$.$

$0\mathrm{.}5$

D$.$

$1$