Schweser Volume 1 Mock 2 AM Session Q21

Why is the current capital structure used in the calculation of the required return on equity and not the target capital structure? The curriculum even says to use target structure whenever given.

The question asked you to calculate FCFE, so you need cost of equity and not WACC.

Yes, but to find the cost of equity you need Beta. And using the target capital structure with the added debt will have a higher Beta than if the company has no debt.