In mid-2015, Cisco Systems had a market capitalization of $99 billion. It had A-rated debt of $18

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In mid-2015, Cisco Systems had a market capitalization of $99 billion. It had A-rated debt of $18 billion as well as cash and short-term investments of $52 billion, and its estimated equity beta at the time was 1.16.

a. What is Cisco’s enterprise value?

b. Assuming Cisco’s debt has a beta of zero, estimate the beta of Cisco’s underlying business enterprise.

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Corporate Finance The Core

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Authors: Jonathan Berk, Peter DeMarzo

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In mid-2015, Cisco Systems had a market capitalization of $99 billion. It had A-rated debt of $18

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