The spreadsheet for this problem contains information about Kroger Company and four industry competitors in 2017. It is available for download from McGraw-Hill’s Connect or your course instructor (see the Preface for more information). Using this information:

a. Estimate the industry asset beta, weighting each competitor by its proportion in the total market value of equity of all four competitors.

b. Relever the industry asset beta to reflect Kroger’s capital structure to estimate an industry-based equity beta for Kroger.

 LO.1