The current risk-free rate is 4.0% and the expected rate of return on the market portfolio is 10.0%. The Brandywine Corporation has two divisions of equal market value, the brandy division and the wine division. The debt to equity ratio (D/E) is (3 / 9 ). The company's debt can be assumed to present no risk of default. For the last few years, the Brandy division has been using a discount rate of 12.0% in capital budgeting decisions while the Wine division has been using a discount rate of 10.0%. You have been asked by their managers to report on whether these discount rates are properly adjusted for the risk of the projects in the two divisions.

What is the equity beta that is consistent with the discount rates used by Brandywines two divisions?