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. ($ millions) Firm iRobot Middleby's National Presto Newell Brands Whirlpool Beta Debt Market Value of Equity 0.99 $ 0 $ 3,490 1.94 777 0.19 0 1.14 11,968 1.84 4,545 7,610 904 27,270 14,610 a. Estimate an asset beta for Sinaloa Appliance. Note: Round intermediate calculations and final answer to 3 decimal places. Asset beta

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. ($ millions) Firm iRobot Middleby's National Presto Newell Brands Whirlpool Beta Debt Market Value of Equity 0.99 $ 0 $ 3,490 1.94 777 0.19 0 1.14 11,968 1.84 4,545 7,610 904 27,270 14,610 a. Estimate an asset beta for Sinaloa Appliance. Note: Round intermediate calculations and final answer to 3 decimal places. Asset beta

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 13PB: You are a consultant working with various companies that are considering incorporating and listing...

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Could you help me figure out the cost of equity and WACC for a company based on the information below? This is for a scenario where Kelvin, who’s just been appointed as the financial manager of MetaGreen, wants to apply his understanding of the cost of capital from his finance course to make sound financial decisions. Here’s the company information: Company Listing and Stock Info: Listed on the stock exchange Common stock market value: $2,080,000 Beta: 2 Market risk premium: 4% Risk-free rate: 3% Cost of Capital Components: Cost of debt: 7% Cost of preferred stock: 8% Tax rate: 34% Preferred Stock Details: 40,000 preferred shares outstanding Market price of preferred stock: $34 per share Bond Info: Bonds' total market value: $560,000 Could you show me how to use CAPM to find the cost of equity and then calculate the weighted average cost of capital (WACC) for the company?
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For the following four IPOs, please find the total amount raised, the amount that went to the firm, and the amount that went to the underwriters/investment banks, and the gross spread. This information is available on the SEC Edgar database. Total S Amount S Raised by the SAmount Paid to S Offer S Bid Gross Raised Investment Banks Price Price Issuer Spread % Wingstop Shake Shack Alibaba Wingstop
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Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Callaway Golf (ELY) Alaska Air Group (ALK) Yum! Brands (YUM) Caterpillar Tractor (CAT) Microsoft (MSFT) Number of Market Capitalization ($ millions) $ 2,572 Share (millions) X Stock Price = 94.2 X 27.30 123.7 301.7 543.3 7,560 X 50.70 X 103.07 186.66 242.12 == $ 101,412 = $ 1,830,427 xx $ 6,272 $ 31,096 S a. The price of Yum! Brands stock has risen to $180. What is the market value of the firm's equity if the number of outstanding shares does not change? Note: Enter your answer in dollars not in billions of dollars. b. The rating agency has revised Catalytic Concepts' bond rating to A (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? Note: Enter your answer as a percent rounded to 1 decimal place. c. A farmer and a meatpacker use the commodity markets to reduce their risk. One agrees to buy live cattle in the future…
Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Number of Share Market Capitalization ($ millions) 1547.66 (millions) Stock Price = Callaway Golf (ELY) Alaska Air Group (ALK) Yum! Brands (YUM) Caterpillar Tractor (CAT) Microsoft (MSFT) $ 16.36 $ 61.96 $ 85.13 $597.63 $ 91.27 94.6 123.4 7645.86 $ 28,305.73 $ 88,090.66 332.5 147.4 7,705.0 $703,235.35 a. The price of Yum! Brands stock has risen to $185. What is the market value of the firm's equity if the number of outstanding sha does not change? (Enter your answer in billions rounded to 3 decimal places.) O Answer is complete but not entirely correct. Market value $33,114.270 8 b. The rating agency has revised Catalytic Concepts' bond rating to BBB (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 1 decimal place.) Interest rate Ac Graw Hill 1 of 8 Prev Next > MacBook Air…
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Your firm is planning to invest in a new electrostatic power generation system. Ampthill Inc is a firm that specializes in this business. Ampthill has a stock price of $25 per share with 20 million shares outstanding. Ampthill's equity beta is 1.4. It also has $220 million in debt outstanding with a debt beta of 0.1. Your estimate of the asset beta for electrostatic power generators is closest to 1.18 1 0.79 1.3
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You have been presented with the following set of financial statements for National Property Trust, a REIT that is about to make an initial stock offering to the public. This REIT specializes in the acquisition and management of warehouses. Your firm, Blue Street Advisors, is an investment management company that is considering the purchase of National Property Trust shares. You have been asked to prepare a financial analysis of the REIT. National Property Trust Panel A. Operating Statement Summary Net revenue $ 101,000,000 Less: Operating expenses 40,400,000 Depreciation and amortization 23,000,000 General and administrative expenses 6,100,000 Management expense 3,100,000 Income from operations 28,400,000 Less: Interest expense* 6,400,000 Net income (loss) $ 22,000,000 *At 8% interest only. Panel B. Balance Sheet Summary Assets Cash $ 51,600,000 Rents receivable 2,600,000 Properties @ cost 710,000,000 Less: Accumulated depreciation…
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