Here in last line of question they asked us to calculate the Beta of equity and in(i) and (ii) part of question we have already calculated the beta of the unlevered firm,
So as per (Beta of debt*weight of debt )+(Beta of equity*weight of equity)=beta of unlevered firm. We can calculate beta of equity but we first require Beta of debt !!! How do we get it !? In solution they calculated it by (kd-rf)/(rm-rf)…. please give logic for this or any other alternative.
put the yield on debt and beta of debt in the sml equation