What is McCoy's debt-equity ratio?

Question

McCoy, Inc., has equity with a market value of $40 million and debt with a market value of $20 million. The cost of the debt is 6 percent semi-annually. Treasury bills that mature in one year yeild 5 percent per annum, and the expected return on the market portfolio over the next year is 15 percent. The beta of McCoy's equity is 0.8. The firm pays no taxes.

Answer 1

0.5