Question: Rating AAA AA A BBB BB B CCC Average Beta 0.05 0.05 0.05 0.10 0.17 0.26 0.31 Company Market Value of Equity ($m) Market Value

Rating

AAA

AA

A

BBB

BB

B

CCC

Average Beta

0.05

0.05

0.05

0.10

0.17

0.26

0.31

Company

Market Value of Equity

($m)

Market Value of Debt

($m)

Equity

Beta

Debt

Rating

Nike

$4,500

$3,500

1.1

BBB

Your estimate of the debt beta for Nike would be:___

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