Consider this case: Globex Corp. has a capital structure that consists of 35% debt and 65% equity. The firm's current beta is 1.25 , but management wants to understand Globex Corp.'s market risk without the effect of leverage. If Globex Corp. has a 25% tax rate, what is its unlevered beta? 0.89 0.98 0.71 0.76 Now consider the case of another company: US Robotics Inc. has a current capital structure of 30\% debt and 70% equity. Its current before-tax cost of debt is 10%, and its tax rate is 25%. It currently has a levered beta of 1.25 . The risk-free rate is 2.5%, and the risk premium on the market is 7%. US Robotics Inc. is considering changing its capital structure to 60% debt and 40% equity. Increasing the firm's level of debt will cause its before-tax cost of debt to increase to 12%