In mid-2012, Cisco Systems had a market capitalization of $101 billion. It had A-rated debt of $16

Question:

In mid-2012, Cisco Systems had a market capitalization of $101 billion. It had A-rated debt of $16 billion as well as cash and short-term investments of $48 billion, and its estimated equity beta at the time was 1.23.

a. What is Cisco’s enterprise value?

b. Assuming Cisco’s debt has a beta of zero, estimate the beta of Cisco’s underlying business enterprise.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For answer-question

Corporate Finance

ISBN: 9780132992473

3rd Edition

Authors: Jonathan Berk, Peter DeMarzo

See More Books

Question Posted: Mar 07, 2024 01:00 AM

See More Questions

In mid-2015, Cisco Systems had a market capitalization of $135 billion. It had A-rated debt of $27 billion as well as cash and short-term investments of $57 billion, and its estimated equity beta at...
In mid-2015, Cisco Systems had a market capitalization of $130 billion. It had A-rated debt of $25 billion as well as cash and short-term investments of $60 billion, and its estimated equity beta at...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
Use the DerivaGem software to value a five-year collar that guarantees that the maximum and minimum interest rates on a LIBOR-based loan (with quarterly resets) are 7% and 5% respectively. The LIBOR...
Provide two examples of how management accounting information can be used to support a sustainability approach.
Platforms was a publicly traded company that developed new technology to provide cellular service to large geographic territories. Martin was the chairman and CEO of Platforms, but he also was an...
Acne Medication and Gastrointestinal Injury Since 1999, Kamie Kendall had experienced ongoing abdominal pain, and she was eventually diagnosed with ulcerative colitis and irritable bowel syndrome...
Peck Electronics produces video games in three market categories, commercial, home, and miniature. Peck has traditionally allocated overhead costs to the three products using the companywide...
Consider two descriptive facts. First, the poorest countries in the world are disproportionately located close to the equator. Second, the civilizations that were richest in 1500 are among the...
If investors attempt to buy a stock with a positive alpha, what is likely to happen to its price and expected return? How will this affect its alpha?
Suppose Best Buy stock is trading for $20 per share for a total market cap of $6 billion, and Walt Disney has 1.8 billion shares outstanding. If you hold the market portfolio, and as part of it hold...
In the oil industry, water that mixes with crude oil during production and transportation must be removed. Chemists have found that the oil can be extracted from the water/oil mix electrically....
Read the Sun and Shek, 2012 (attached) and answer the following questions. What was the most predominant theme that emerged from the article? What were some of the main reasons students gave for poor...
As health-care costs increase, payers are turning to technology and outsourced services to keep a lid on expenses. The amount of health-care information technology (IT) spending by payer is projected...
Which sensor uses microwave wavelengths for passive remote sensing? Explain and provide example.
Explain both positive and negative ways that communication has been impacted by the advancement of technology. Provide examples to support your explanation. In your opinion, does digital technology...
A taxpayer foreclosed on a home in TY2022 and was able to exclude $45,000 of qualified principal residence indebtedness on the basis of insolvency. However, they were not able to exclude the rest of...
For the airfoil given in Prob. 4.6, calculate cm c/4 and xcp/c when =3. Data from 4.6 The NACA 4412 airfoil has a mean camber line given by Using thin airfoil theory, calculate (a) L=0 (b) c 1 when...
Show that the block upper triangular matrix A in Example 5 is invertible if and only if both A 11 and A 22 are invertible. Data from in Example 5 EXAMPLE 5 A matrix of the form A = [ A11 A12 0 A22 is...
Do bonds with a standard call feature have a higher or lower yield than otherwise identical bonds without a call feature? Why?
Will a drop in interest rates make it advantageous for a company to call a bond with a Canada call feature?
1. Natasha is an example of what kind of an investor? 2. At each funding stage prior to the IPO (i.e., 1985, 2000, 2003, and 2006) calculate the pre-money and post-money valuation of the equity of...
1) For each of the conduits, s elect suitable gates and/or valves, on the locations stated below. Select operating mechanisms and briefly describe gates/valves selected. For Tower Irrigation intake:...
Use Solidworks ( Computer Aided Design) to create 3D Model associated with the following part using MMGS units. 2.95 R 3.00- 4.5 -2.00 5.17 -7.00- 01.50 3.00 2.00 -3.00- -6.00- 2.00
Question 2 The gate shown in Fig. 2 is holding back water with p = 1000 kg/m and depth h = 3.5 metres. The gate has a width of 2.5 metres into the page. (a) The toggle mechanism concept has been used...

In mid-2012, Cisco Systems had a market capitalization of $101 billion. It had A-rated debt of $16

Question:

Step by Step Answer:

Corporate Finance

Students also viewed these Business questions