An analyst gathered the following information about a private company and its publicly traded competitor: Using the

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An analyst gathered the following information about a private company and its publicly traded competitor:

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Using the pure-play method, the estimated equity beta for the private company is closest to:
A. 1.029.
B. 1.104.
C. 1.877.

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Corporate Finance A Practical Approach

ISBN: 9781118217290

2nd Edition

Authors: Michelle R Clayman, Martin S Fridson, George H Troughton, Matthew Scanlan

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Question Posted: Mar 29, 2024 12:00 AM

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An analyst gathered the following information about a private company and its publicly traded competitor: Using the

Question:

Comparable Companies Tax Rate Debt/Equity Equity Beta Private company 30.0% 1.00 N.A. Public company 35.0% 0.90 1.75

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Corporate Finance A Practical Approach

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