The CFO of Sterling Chemical is interested in evaluating the cost of equity capital for his firm. However, Sterling uses very little debt in its capital structure (the firm's debt-to-equity capitalization ratio is only 20%), while larger chemical firms use substantially higher amount of debt. The following table shows the levered equity betas, debt-to-equity ratios, and debt betas for three of the largest chemical firms:

Company Name	Levered Equity Betas	Debt/Equity Capitalizatioin	Assumed Debt Betas
Easman Chemical Co. (EMN)	1.79	30.77%	0.30
Celanese Copr. (CE)	1.98	23.55%	0.30
Dow Chemical Company (DOW)	1.71	21.60%	0.30

a. Use the information given above to estimate the unlevered equity betas for each of the companies.

b. If Sterling's debt-to-equity capitalization ratio is .20 and its debt beta is 30, what is your estimate of the firm's levered equity beta?