Question: Using the formula given, please solve and please show work and calculations. Johnson company has an equity beta of 1.5, the risk-free rate of return

Using the formula given, please solve and please show work and calculations.

Johnson company has an equity beta of 1.5, the risk-free rate of return is 3.0 percent, the market return is 14.7 percent, and the pretax cost of debt is 9.4 percent. The debt-equity ratio is .47. If you apply the common beta assumptions, what is the companys asset beta?

The Formula

B_portfolio= B_asset= S/B + S X B_equity+ B/ B + S X B _debt

The Given

Risk free rate	3%
Market Return	14.70%
Pretax Cost of Debt	9.40%
Equity Beta	1.5
Debt Equity ratio	0.47

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