Question: Answer #1 is correct, please answer #2 thank you SPC Inc. has a capital structure of 35% debt and 65% equity, its tax rate is

Answer #1 is correct, please answer #2 thank you

SPC Inc. has a capital structure of 35% debt and 65% equity, its tax rate is 25%, and its beta (levered) is 0.90. Based on the Hamada equation, what would the firm's beta be if it used no debt, i.e., what is its unlevered beta, bu? 2.15 O 0.38 0.64 1.26 QUESTION 2 Suppose in the question above, SPC decided to change its capital structure such that it has 60% debt and 40% equity. What would the firm's new levered beta be? 1.36 0.96 0.30 O 0.43

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