Question
Question 3. You would like to estimate the beta of a private company that manufactures home appliances. You have collected the following information about similar
Question 3.
You would like to estimate the beta of a private company that manufactures home appliances. You have collected the following information about similar companies:
Equity Beta Debt MV Equity
Black&Decker 1.40 $2500 $3000
Fedders 1.20 $5 $200
Maytag 1.20 $540 $2250
The private company and the publicly traded companies all have a tax rate of 40. The private company has a debt/equity ratio of .25.
Estimate the asset beta and equity beta for the private firm.
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Budgets And Financial Management In Higher Education
Authors: Margaret J. Barr, George S. McClellan
3rd Edition
1119287731, 9781119287735
