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Not sure how to figure this out.... Extra Credit. Worth an extra 4 points for Exercise 1 Organic Grocery is contemplating moving towards the product
Not sure how to figure this out....
Extra Credit. Worth an extra 4 points for Exercise 1 Organic Grocery is contemplating moving towards the product diversity seen by its two main competitors. As a result, it desires to estimate a new beta based upon their underlying business risk. Organic Grocery estimates it will have a capital structure different than these peers, it estimates it's target debt ratio is 25%. Peer Company Information. Equity MV MV Company Beta Debt Equity Kroger Sprouts 0.80 5,898 15,236 1.16 615,762 What is the average peer beta of Organic Grocery's peers? Use the columns in the table above to show your steps in developing your answer. Answer: Average Peer beta 0.98 What is your estimate of the Organic Grocery beta using the peer-based beta? Show all steps in your answer below and label all inputs. Answer: Organic Grocery Equity beta estimate Inputs and steps: Extra Credit. Worth an extra 4 points for Exercise 1 Organic Grocery is contemplating moving towards the product diversity seen by its two main competitors. As a result, it desires to estimate a new beta based upon their underlying business risk. Organic Grocery estimates it will have a capital structure different than these peers, it estimates it's target debt ratio is 25%. Peer Company Information. Equity MV MV Company Beta Debt Equity Kroger Sprouts 0.80 5,898 15,236 1.16 615,762 What is the average peer beta of Organic Grocery's peers? Use the columns in the table above to show your steps in developing your answer. Answer: Average Peer beta 0.98 What is your estimate of the Organic Grocery beta using the peer-based beta? Show all steps in your answer below and label all inputs. Answer: Organic Grocery Equity beta estimate Inputs and stepsStep by Step Solution
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