You are interested in estimating a beta for Digital Universe Company. Since they are a privately held firm, you do not have access to the necessary data. If you want to estimate a beta for DUC, you will have to work with some comparable firm data. Un levered Beta for companyJS =1.20 Un levered Beta for company YS= 1.07 Un levered Beta for company ER= 0.84 Un levered Beta for company HMH= 0.82 b) Estimate an equally-weighted and sales-weighted average unlevered betas using the data from the unlevered beta above.
You are interested in estimating a beta for Digital Universe Company. Since they are a privately held firm, you do not have access to the necessary data. If you want to estimate a beta for DUC, you will have to work with some comparable firm data. Un levered Beta for companyJS =1.20 Un levered Beta for company YS= 1.07 Un levered Beta for company ER= 0.84 Un levered Beta for company HMH= 0.82 b) Estimate an equally-weighted and sales-weighted average unlevered betas using the data from the unlevered beta above.
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
Related questions
Question
You are interested in estimating a beta for Digital Universe Company. Since they are a privately held firm, you do not have access to the necessary data. If you want to estimate a beta for DUC, you will have to work with some comparable firm data.
Un levered Beta for companyJS =1.20
Un levered Beta for company YS= 1.07
Un levered Beta for company ER= 0.84
Un levered Beta for company HMH= 0.82
b) Estimate an equally-weighted and sales-weighted average unlevered betas using the data from the unlevered beta above.
Transcribed Image Text:Comparable Firms
Sales
Levered
Total
Таx
(S Mill)
Beta
1.45
Debt Ratio
Rate
Judy in the Sky, Inc.
Yellow Submarine, Ltd.
Eleanor Rigby, Co.
Hold My Hand, LLC
54.86
22.0%
25%
312.29
1.33
27.0%
35%
18.90
1.12
32.0%
30%
75.35
1.23
45.0%
28%
461.40
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education