Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the companys
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Question:
Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the company’s beta. You have obtained the following equity betas for publicly traded firms that also manufacture home appliances.
($ millions) | |||||||
Firm | Beta | Debt | Market Value of Equity | ||||
iRobot | 0.87 | $0 | $ | 2,890 | |||
Middleby's | 1.82 | 741 | 7,370 | ||||
National Presto | 0.07 | 0 | 772 | ||||
Newell Brands | 1.02 | 11,908 | 26,070 | ||||
Whirlpool | 1.72 | 4,485 | 13,770 | ||||
a. Estimate an asset beta for Sinaloa Appliance. (Round intermediate calculations and final answer to 3 decimal places.)
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