Lauryn’s Doll Co. had EBIT last year of $40 million, which is net of a depreciation expense of $4 million. In addition, Lauryn’s made $5 million in capital expenditures and increased net working capital by $3 million. Using the information from Problem 3, what is Lauryn’s FCF for the year?

Data From Problem 3

You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources, you find that Lauryn’s has a reported equity beta of 1.4, a debt-to-equity ratio of 0.3, and a tax rate of 30 percent. Based on this information, what is the asset beta for Lauryn’s?