Consider the following information regarding corporate bonds: Rating AAA AA A BBB BB B CCC Average Default
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Question:
Consider the following information regarding corporate bonds:
Rating AAA AA A BBB BB B CCC
Average Default Rate 0.0% 0.1% 0.2% 0.5% 2.2% 5.5% 12.2%
Recession Default Rate 0.0% 1.0% 3.0% 3.0% 8.0% 16.0% 48.0%
Average Beta 0.05 0.05 0.05 0.10 0.17 0.26 0.31
Company Market Capitalization ($mm) Total Enterprise Value ($mm) Equity Beta Debt Rating
Transcontinental $4500 $8000 1.1 BBB
Rearden Metal $3800 $7200 1.3 AAA
Wyatt Oil $2400 $3800 0.9 A
Nielson Motors $1500 $4400 1.75 BB
The asset beta for Rearden Metal is ________.
(Please write your answer as a number, with two decimal places. e.g. write "0.1234" as "0.12")
Related Book For
Stats Data And Models
ISBN: 662
4th Edition
Authors: Richard D. De Veaux, Paul D. Velleman, David E. Bock
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