Sinaloa Appliance, Incorporated, a private firm that manufactures home appliances, has hired you to estimate the...

 

Transcribed Image Text:

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 1.03 $ 0 $ 3,690 1.98 789 0.23 0 1.18 11,988 1.88 4,565 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. 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 1.03 $ 0 $ 3,690 1.98 789 0.23 0 1.18 11,988 1.88 4,565 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. Asset beta

Answer rating: 100% (QA)

Answer To estimate the asset beta for Sinaloa Appliance we can use the Hamada equation which relates ... View the full answer