Assuming that there is an unlevered firm and a levered firm. The basic information is given by the following table. Table 1: Information of the firms Unlevered firm Levered firm EBIT 10,000 10,000...

Assuming that there is an unlevered firm and a levered firm. The basic information is given by the following table.

Table 1: Information of the firms

Assuming that cost of debt =8%; unlevered cost of capital =10%; systematic risk of the asset is 1.5

Suppose that the firm changes its capital structure so that the debt-to-equity ratio is 1.0, then recalculate the systematic risk of the equity