Sinaloa Appliance, Incorporated, a private firm that manufactures home appliances, has hired you to estimate the company's beta. Youhave obtained the following equity betas for publicly traded firms that also manufacture home appliances.PirmRobotMiddleby'sNational PrestoNevell BrandsWhirlpoolBeta0.941.89Asset beta0.141.091.79Debt(5 millions)50762D11,9434,520Market Value ofEquity3,2407,51084926,77014,260a. Estimate an asset beta for Sinaloa Appliance.Note: Round intermediate calculations and final answer to 3 decimal places.

FirmBetaDebtEquityiRobot0.9403240Middleby'21.897627510National Presto0.140849Newell…

Sinaloa Appliance, Incorporated, 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. Pirm Robot Middlaby's National Presto Nevell Branda Whirlpool Beta 0.94 1.89 Asset beta 0.14 1.09 1.79 Debt (8 millions) 80 762 D 11,943 4,520 Market Value of Equity 3,240 7,510 849 26,770 14,260 a. Estimate an asset beta for Sinaloa Appliance. Note: Round Intermediate calculations and final answer to 3 decimal places.

Sinaloa Appliance, Incorporated, 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. Pirm Robot Middlaby's National Presto Nevell Branda Whirlpool Beta 0.94 1.89 Asset beta 0.14 1.09 1.79 Debt (8 millions) 80 762 D 11,943 4,520 Market Value of Equity 3,240 7,510 849 26,770 14,260 a. Estimate an asset beta for Sinaloa Appliance. Note: 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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F2 A few publicly listed home appliance manufacturing companies have the following beta, debt, and equity: Company Beta Debt Equity Apple 1.4 ₹ 2,500 ₹ 3,000 Pear 1.2 ₹ 5 ₹ 200 Grape 1.2 ₹ 540 ₹ 2,250 Tomato 0.7 ₹ 8 ₹ 300 Watermelon 1.5 ₹ 2,900 ₹ 4,000 Calculate the beta of the industry keeping in mind the publicly listed sector only, with a debt equity ratio of 25%. (Assume a Tax Rate for all companies at 35%) (Hint- One way is to compute the unlevered betas of each of the five firms and then average these unlevered betas and substitute it as the unlevered beta for a private company)
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Task 4 Mr. M. Boy is the CEO of Money GmbH. His friends told him that the shares of Koinbase AG, which enables trading in a new type of cryptocurrency called "Litcoin", are particularly suitable for speculative purposes. Since he likes the name of the coin, he decides that Money GmbH will acquire shares of Koinbase AG worth €150k in t1. For a long-term investment, he also buys shares in Desla AG worth €200,000 on December 31. The performance of Desla AG shares is as follows: Mr. M.-Boy is not sure how Desla AG's share price could continue to evolve, as Desla AG's CEO, Mr. Helon Nusk, has often missed announced targets in the past. Mr. M.-Boy is interested in the highest possible annual result at t2. Money GmbH's balance sheet date is December 31. a) How should the shares of Desla AG be committed at t2? Justify your action! b) The share price of Koinbase AG has also fallen rapidly. The total market price of the shares is only 80 T€. How to close the end of t2? Justify your action! c)…
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Sinaloa Appliance, Incorporated, 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. Firm iRobot Middleby's National Presto Newell Brands Whirlpool Beta 1.03 1.98 0.23 1.18 1.88 Asset beta Debt $0 789 ($ millions) 11,988 4,565 Market Value of Equity $ 3,690 7,690 948 27,670 14,890 a. Estimate an asset beta for Sinaloa Appliance. Note: Round intermediate calculations and final answer to 3 decimal places.
Bark and Bliss Limited is a pet supply company headquartered in Edmonton, Alberta. They have four different lines of business. Here is an excerpt of their financial statements for the December 31, 2020 fiscal year: Dog Walking Brick & Division Online Shop Pet Training & Pet Care Mortar Stores Sales $1 22,500,000 13,980,000 27,630,500 5,407,000 Net operating income $4 1,250,000 1,840,000 2,845,200 1,134,750 Average operating assets $1 7,580,000 8,275,000 14,500,000 5,250,000 Bark and Bliss Limited has a policy that all investments must have a rate of return of at least 15%. Required: a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to one decimal place, b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return on investment? Acti c. What is the residual income for each of Bark and Bliss' four lines of businessa Go to
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