Question
Sinaloa Appliance, Incorporated, a private firm that manufactures home appliances, has hired you to estimate the companys beta. You have obtained the following equity betas
Sinaloa Appliance, Incorporated, 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.
| Firm | Beta | ($ millions) | |
|---|---|---|---|
| Debt | Market Value of Equity | ||
| iRobot | 1.01 | $ 0 | $ 3,590 |
| Middleby's | 1.96 | 783 | 7,650 |
| National Presto | 0.21 | 0 | 926 |
| Newell Brands | 1.16 | 11,978 | 27,470 |
| Whirlpool | 1.86 | 4,555 | 14,750 |
a. Estimate an asset beta for Sinaloa Appliance.
Note: Round intermediate calculations and final answer to 3 decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting For Management
Authors: N Ramachandran
3rd Edition
1259004694, 978-1259004698
