Suppose Samuel Eliot Morison and Gary Galles met. What would be Morison's argument in favor of the Federalists? What would be Galles' counterargument?

Their underlying asset beta is closest to is 1.08

Explanation:

According to the given data we have the following:

Debt is given as $78 billion

Equity is given as $142 billion

equity beta given as 1.68

Therefore, in order to calculate the underlying asset beta we would have to use the formula of the the equity beta for a levered firm as follows:

betaE =beta A [1 + (Debt / Equity)]

1.68 = \beta A [1 + ($78 B/ $142 B)]

1.68 = \beta A [1 + 0.5493]

betaA = 1.68 / 1.5493

betaA = 1.08

Their underlying asset beta is closest to is 1.08