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You are trying to evaluate a private firm s potential as a good investment opportunity. Your mentor at the investment bank you interned during the
You are trying to evaluate a private firms potential as a good investment opportunity. Your mentor at the investment bank you interned during the summer told you to collect information on comparable firms, which will help you find the WACC of the private firm. The private firm has NDE ratio of The risk free rate is Market risk premium is Cost of debt for the private firm is assumed is The tax rate is
The following table lists the information you have gathered:
Firm Beta Equity Equity Million Debt Million Cash Million
A
B
C
D
Q Calculate the asset beta for firm D
point graded
Input the asset beta for firm D
Q What is the equity beta for the private firm?
point graded
Enter the equity beta for the private firm. use the result from problem keep two decimal points
Q What is the cost of equity for the private firm?
point graded
Input the cost of equity for the private firm. use the result from problem keep two decimal points
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