Question
Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the companys beta. You have obtained the following equity betas
Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the companys beta. You have obtained the following equity betas for publicly traded firms that also manufacture home appliances.
| ($ millions) | |||||||
| Firm | Beta | Debt | Market Value of Equity | ||||
| iRobot | 0.96 | $0 | $ | 3,340 | |||
| Middleby's | 1.91 | 768 | 7,550 | ||||
| National Presto | 0.16 | 0 | 871 | ||||
| Newell Brands | 1.11 | 11,953 | 26,970 | ||||
| Whirlpool | 1.81 | 4,530 | 14,400 | ||||
a. Estimate an asset beta for Sinaloa Appliance. (Round intermediate calculations and final answer to 3 decimal places.)
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
5th edition
321280299, 321280296, 978-0321280299
