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UNLEVERED BETA Hartman Motors has $12 million in assets, which were financed with $3.6 million of...

UNLEVERED BETA

Hartman Motors has $12 million in assets, which were financed with $3.6 million of debt and $8.4 million in equity. Hartman's beta is currently 1.15, and its tax rate is 35%. Use the Hamada equation to find Hartman's unlevered beta, bU. Do not round intermediate calculations. Round your answer to two decimal places.

bU = ______

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Answer #1
Levered Beta = Unlevered Beta x (1 + ((1 – Tax Rate) x (Debt/Equity)))
1.15 = Unlevered Beta*(1+((1-0.35)*(0.428571428571429)))
Unlevered Beta = 0.9
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