Please Give Step by Step AnswerOtherwise i give DISLIKES !! 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.($ millions)FirmiRobotMiddleby'sNational PrestoNewell BrandsWhirlpoolBetaDebtMarket Value ofEquity0.99$ 0$ 3,4901.947770.1901.1411,9681.844,5457,61090427,27014,610a. Estimate an asset beta for Sinaloa Appliance.Note: Round intermediate calculations and final answer to 3 decimal places.Asset beta

Step 1:iRobot = 0.99 x 3,490/3,490+0 = 0.99Middleby's = 1.94 x 7,610/7,610+777 = 1.760National…

Answered: Sinaloa Appliance, Incorporated, a…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 85PSB

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• Choose a publicly traded company. • Note: Be sure to choose a company that no other classmate has chosen. • Determine its beta from a published source. • Hint: Use Yahoo!Finance or NASDAQ to find the company's beta. ▪ Find the company's financial information by putting the company's name in the search bar. . Calculate the company's cost of equity using the CAPM formula and the short-term risk-free rate assumptions. ▪ Use 8.5 percent as the market risk premium. ▪ Use the current 90-day yield (3-month yield) on U.S. Treasuries as the risk-free rate. Hint: Use the U.S. Department of the Treasury's Resource Center to look up current 90-day (3-month) Treasury Yield Curve Rates. ▪ Provide your calculations in a table in your post. ▪ How Do I Insert a Table Using the Rich Content Editor? B • Calculate the company's cost of equity using the CAPM formula and the long-term risk-free rate assumptions. ▪ Use 7.0 percent as the market risk premium ▪ Use the current 20-year yield on U.S.…
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a. Based on the information in the picture, calculate, using market values, Globex PLC weighted average cost of capital. Please show workings b. Criticallly discuss any two assumptions underpinning the post tax version of Modigliani & Miller model of the relationship between WACC and gearing
Investment Planning Activity1. Suppose that Rodel Rivera places an order to buy 100 shares of SM Investments Corp. (SM) from an online broker. Explain how the order will be processed.
As a business valuation expert, you have been allotted with the project to estimate the cost of equity for Alton Holdings. Alton Holdings operates in three different business sectors - Entertainment, Hotels, and Travel Services. The table beneath gives the information you collected both for the firm and for other comparable firms in each business sector. i. ii. iii. Business Sector Entertainment Hotel Travel Alton Holdings Sales Revenues €500 million €500 million €950 million Unlevered beta 0.95 1.15 Comparable Firms 1.45 Value/Sales Revenues 2.5 3.5 1.5 Estimate the (bottom-up) unlevered beta for Alton Holdings. Assume that Alton Holdings has no market-traded debt but €1.3 billion in book debt, an interest expense of €75 million per year, maturity 5 years and corporate bonds with the same credit rating as Alton Holdings yield 7.5%. Estimate the market value of debt of Alton Holdings. Assume next that Alton Holdings has 100 million shares trading at €12 per share. The tax rate is 40%.…
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Topic: ISLAMIC INVESTMENT Answer all the following question?. Assume that you are the President of ABC Investments, a firm that invests in stock exchange markets worldwide. As president, you appointed investment Managers, Alam and Anas, to select shares that you would invest RM215,000 in each in January next year. Then, managers will manage shares and advise when to sell them, bearing in mind the objective to maximize return. Table 1 shows the data collected in the subsequent year. Investment manager Alam Anas Initial investment RM215,000 RM215,000 Sale value RM229,000 RM235,000 Holding period 4 months 7 months Dividends collected RM6,000 RM9500 Calculate the HPR for the stock of both Investment managers. What is the annualize HPR for Alam and Anas? Note: that the consumer price index (CPI) is a measure taken from examining the average of prices from a hypothetical basket of goods and services purchased by…
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Estimate the weighted-average cost of capital for Home Depot (HD), Altria (MO), Caterpillar (CAT), and Intel (INTC). You can estimate the expected stock returns for these companies by using the betas shown on finance.yahoo.com. You can also use Yahoo! Finance to find the relative proportions of equity and debt for each company. Remember, though, to use the mar- ket value of the equity, not its book value. Finding the yield on the debt is a little trickier. One possibility it to log on to the Federal Reserve Bank of St. Louis site at https://fred.stlouisfed .org/ to find the current level of Treasury yields and the yield spreads (i.e., the extra yield for bonds with different ratings). An alternative is to view recent transactions at www.finra.org /industry/trace/corporate-bond-data. Note: As we write this, Moody's provides an A rating for all four companies.
How is AIC currently valued in the stock market? (under, over, fairly) Your firm's client makes her investment decisions based on research report and requires 30% margin safety. What would be her investment decision if AIC price falls to $40?
From the data presented below, name the company which is most desirable as investment and therefore the one you will recommend for investors to buy.

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