Question
IDX Tech is looking to expand its investment in advanced security systems. The project will be financed with equity. You are trying to assess the
IDX Tech is looking to expand its investment in advanced security systems. The project will be financed with equity. You are trying to assess the value of theinvestment, and must estimate its cost of capital. You find the following data for a publicly-traded firm in the same line of business:
Debt outstanding (book value, AA-rated) $367 million
Number of shares of common stock 81 million
Stock price per share $14.05
Book value of equity per share $7.18
Beta of equity 1.34
By making some realisticassumptions, estimate the project's beta.
The estimated project's beta is _______(Answer) (Round to two decimal places.)
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