Question: Current Wd 25% Tax rate 25% Structure Ws 75% Cost of Equity 14.4% Other Rf 5% Tax rate 25% Factors Market Risk Premium 9.8% As

Current Wd 25% Tax rate 25%
Structure Ws 75%
Cost of Equity 14.4%
Other Rf 5% Tax rate 25%
Factors Market Risk Premium 9.8%

As a CEO, you considering a change to your company's capital structure. The CFO believes the firm should increase the debt ratio (D/E) to 1.5.
What is the levered beta of the target capital structure?

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