IDX Tech is looking to expand its investment in advanced security systems. The project will be financed with equity. You are trying to assess the value of the investment, and must estimate its cost of capital. You find the following data for a publicly-traded firm in the same line of business.

By making some realistic assumptions,  Estimate the project's beta.

Debt outstanding (book value, AA-rated) $433 million

Number of shares of common stock 80 million

Stock price per share$13.87

Book value of equity per share$6.86

Beta of equity1.01

Answer rating: 100% (QA)

We can use the following formula to estimate the projects beta Beta of Project Beta of Equity Market ... View the full answer