Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the company’s 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 0.97 $0 $ 3,390 Middleby's 1.92 771 7,570 National Presto 0.17 0 882 Newell Brands 1.12 11,958 27,070 Whirlpool 1.82 4,535 14,470 a. Estimate an asset beta for Sinaloa Appliance. (Round intermediate calculations and final answer to 3 decimal places.)
Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the company’s 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 0.97 $0 $ 3,390 Middleby's 1.92 771 7,570 National Presto 0.17 0 882 Newell Brands 1.12 11,958 27,070 Whirlpool 1.82 4,535 14,470 a. Estimate an asset beta for Sinaloa Appliance. (Round intermediate calculations and final answer to 3 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the company’s 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 | 0.97 | $0 | $ | 3,390 | |||
| Middleby's | 1.92 | 771 | 7,570 | ||||
| National Presto | 0.17 | 0 | 882 | ||||
| Newell Brands | 1.12 | 11,958 | 27,070 | ||||
| Whirlpool | 1.82 | 4,535 | 14,470 | ||||
a. Estimate an asset beta for Sinaloa Appliance. (Round intermediate calculations and final answer to 3 decimal places.)
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