Kraft has 1.8 billion shares, trading at $40 a share and $ 28 billion in total...

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Kraft has 1.8 billion shares, trading at $40 a share and $ 28 billion in total debt outstanding in January 2012. Over the five years of the regression, Kraft had an average market debt to equity ratio of 20%. The marginal tax rate is 40%. A. Estimate the monthly Jensen's alpha for Kraft Foods, given that the average annualized T.Bill rate over the five years was 1.2%. B. Assuming that the raw beta is a correct assessment of the beta of Kraft during the regression period, estimate the unlevered beta for Kraft Foods for the period. Kraft has 1.8 billion shares, trading at $40 a share and $ 28 billion in total debt outstanding in January 2012. Over the five years of the regression, Kraft had an average market debt to equity ratio of 20%. The marginal tax rate is 40%. A. Estimate the monthly Jensen's alpha for Kraft Foods, given that the average annualized T.Bill rate over the five years was 1.2%. B. Assuming that the raw beta is a correct assessment of the beta of Kraft during the regression period, estimate the unlevered beta for Kraft Foods for the period.

Answer rating: 100% (QA)

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