A company wants to calculate a project's cost of equity capital using the pure-play method. As an initial step, Delaney identifies a comparable publicly-traded company that is a pure-play in the industry with a beta of 1.2. The pure-play company's debt/equity ratio is 1.5, its ROE is 8.1%, and its marginal tax rate is 40%. Calculate the asset (unlevered) beta for this company.

Answer rating: 100% (QA)

The asset unlevered beta is a measure of the companys systematic risk independ... View the full answer