Question: Compute the bottom up beta for Tesla. It operates in three industries Auto&Trucks (70%), Software (Syst&Appl) (20%) and Green and Renewable Energy (10%). Its debt-to-equity

Compute the bottom up beta for Tesla. It operates in three industries Auto\&Trucks (70\%), Software (Syst\&Appl) (20\%) and Green and Renewable Energy (10\%). Its debt-to-equity ratio is 3.5% and marginal tax rate is 24%. Using industry-level unlevered betas (corrected for cash) from the file 'betas' in Week 4 materials folder, please answer the following questions. (Correction for cash creates a slightly cleaner industry beta by purging a 0 -beta cash asset.) Question 1 5 pts What is the unlevered beta for Tesla? 0.66 0.49

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Auto&Trucks unlevered betas = 0.53 Software unlevered betas = 1.15 green an renewable energy unlettered betas = 0.59 I got the weighted average = 0.66 then computed b levered = 0.6775 then got b...

Compute the bottom up beta for Tesla. It operates in three industries Auto\&Trucks (70\%), Software (Syst\&Appl) (20\%) and Green and Renewable Energy (10\%). Its debt-to-equity ratio is 3.5% and...

( 2 0 % ) and Green and Renewable Energy ( 1 0 % ) . Its debt - to - equity ratio is 3 . 5 % and marginal tax rate is 2 4 % . Using industry - level unlevered betas from the file 'betas' in Week 5...

MGMT 479- Strategic Management ANALYZING A CASE STUDY (Revised January 25, 2016) Rubric for Case Study - Maximum Points Available (100 Points) The purpose of the case study is to let you apply the...

Need help with the attached questions from finance major Assignment 3 Questions 1. Anle Corporation has a current price of $27, is expected to pay a dividend of $2 in one year, and its expected price...

See attached, let me know if you can help. Due date its next Monday, but I want to make sure I don't wait to the very last minute. Article Review format (two or three pages maximum) Abstract: One...

aaaaa1. What is the range of investment horizons (in years) that the authors identified? What are the implications of such a wide range on the decision making process? 2. Is there a general consensus...

a a1. What is the range of investment horizons (in years) that the authors identified? What are the implications of such a wide range on the decision making process? 2. Is there a general consensus...

What is the range of investment horizons (in years) that the authors identified? What are the implications of such a wide range on the decision making process? 2. Is there a general consensus on what...

customers, suppliers, and communities in as serious takes place in the firm's business model thow to a way as they track its financial performance. make money). - The triple-bottom-line framework is...

Imagine that a country can produce just two things: goods and services. Assume that over a given time period it could produce any of the following combinations: Units of goods 0 10 20 30 40 50 60 70...

How does each of the following developments affect banks desired equity ratios? Explain. a. An increase in OBS activities. b. A shift from C&I lending to real estate lending. c. A shift from...

3 Exercise 1 0 - 5 ( Algo ) Return on Investment ( ROI ) [ LO 1 0 - 1 ] 1 0 points Provide the missing data in the following table for a distributor of martial arts products: Note: Round "Turnover"...

10) For a bond that pays cash interest (i.e., not a zero coupon bond), YTM is (a) always equal to the coupon rate (b) always equal to the current yield (c) is always less than the coupon rate (d) can...

Give an example of a skip-and-jump survey question. Why should this type of question be avoided? (Objective 3)

How can a writer determine whether to use a formal, third-person style or an informal, firstperson style when writing a formal report? (Objective 1)

You are a new employee for Chapel Hill Gas Company.Your supervisor has asked you to use your creative talents in developing a simple message that could be used to remind customers to pay their bill...