Calculating the Beta of a project

CFA Level I Corporate Finance
#1

When calculating the Beta of a project… after you determine the asset beta when you unlevel a pure play firms, do we use the D/E ratio of the subject firm? Or do we use the D/E ratio of the subject firm after it has raised capital to support the project OR do we use the D/E ratio of the capital being raised for the project?

Thanks!

#2

The latter two, depending on the information in the question provided. Reading 36:

“…We then consider the financial leverage of the project or company and calculate its equity risk, βL,project:”.

#3

Check out Example 11 in that reading (they use the term target D/E ratio).