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Question 1 1 pts Assume you want to find the equity beta of a private firm. Assume you have already identified a comparable firm from

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Question 1 1 pts Assume you want to find the equity beta of a private firm. Assume you have already identified a comparable firm from the same industry. True/False: The assumption you need to make is that the equity betas of the comparable firm and private firm are the same. True False D Question 4 1 pts What is the difference between an asset beta and an equity beta? An equity beta is a measure of systematic risk. An asset beta is a measure of total risk An equity beta is a measure of both "business and financial systematic risk. An asset beta is a measure of just the "business systematic risk. An asset beta is a measure of both business and financial systematic risk. An equity beta is a measure of just the business' systematic risk. Question 16 5 pts The WACC formula is shown below. Pick the answer that best describes each input. wace = rp (1 t) (DE) +rs (0) (16) rp can best be described as ... Select) (17) re can best be described as ... Select) (18) t can best be described as... Select (19) D can best be described as ... Select) (20) E can best be described as ... Select) Question 15 1 pts 'p is an input in the WACC formula. Which of these statements are consistent with our discussion of ro this semester? The cost of debt varies through time depending on whether there is accrued interest associated with bond coupon payments. We use information from the coupon rates on straight debt issues to inter an approximate cost of debt. We can use information from the yield to maturity on straight debt issues to infer an approximate cost of debt. in class we talked about how as a very rough approximation we could solve for using this approximate relationship: r- rE + 6% Question 14 1 pts Assume that BA-asset beta at firm, D-market value of debt, E = market value of equity, Bp - debt beta . Be equity beta . t = tax rate True/False: In a world where there are no tax-advantages to debt, the firm's asset beta can be written as: . Ba = Bp (DIE) + BB (642) True False

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