The coefficient of the stock of a company is 1.32. Its average market value net debt...

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The coefficient of the stock of a company is 1.32. Its average market value net debt ratic is 50%. What is its unlevered ß coefficient? Paper Industry Capital Structure and ß Coefficients as of December 2002 (Million US$ except as noted) Abitibi-Consolidated Bowater Inc. 4 Domtar Inc.4 International Paper Co. Meadwestvaco Corp. Packaging Corp. of America Pope & Talbot, Inc. Temple-Inland Inc. Weyerhaeuser Co. Levered Market Beta¹ Equity2 1.14 4,374 0.70 1,928 0.95 3,356 0.87 16,931 0.99 4,186 0.35 1,874 0.70 186 0.93 1.06 Net Debt³ 5,770 2,278 2,655 11,823 4,809 688 226 2,149 1,772 10,070 14,041 ¹Regression of company returns on S&P 500 returns, unadjusted. 2Shares outstanding times share price. 3Book interest bearing debt minus cash and marketable securities. 4Canadian dollars. Sources: Companies' 10-Ks and 10-Qs and Deutsche Bank Securities. The coefficient of the stock of a company is 1.32. Its average market value net debt ratic is 50%. What is its unlevered ß coefficient? Paper Industry Capital Structure and ß Coefficients as of December 2002 (Million US$ except as noted) Abitibi-Consolidated Bowater Inc. 4 Domtar Inc.4 International Paper Co. Meadwestvaco Corp. Packaging Corp. of America Pope & Talbot, Inc. Temple-Inland Inc. Weyerhaeuser Co. Levered Market Beta¹ Equity2 1.14 4,374 0.70 1,928 0.95 3,356 0.87 16,931 0.99 4,186 0.35 1,874 0.70 186 0.93 1.06 Net Debt³ 5,770 2,278 2,655 11,823 4,809 688 226 2,149 1,772 10,070 14,041 ¹Regression of company returns on S&P 500 returns, unadjusted. 2Shares outstanding times share price. 3Book interest bearing debt minus cash and marketable securities. 4Canadian dollars. Sources: Companies' 10-Ks and 10-Qs and Deutsche Bank Securities.

Answer rating: 100% (QA)

To calculate the unlevered coefficient we need to remove the effect of leverage debt from the levere... View the full answer