Information regarding Kroger Company, and four industry competitors is shown below, on December 12, 2007 Company Equity beta Interest Bearing Debt Market value equity Kroger Company 1 05 $ 6,674 0 $ 17,690 8 Safeway Inc 0 49 5,897 9 15,236 3 Supervalu Inc 1 17 8,936 0 8,054 3 Whole Foods Markets 1 16 760 9 5,762 1 Winn Dixie Stores Inc 2 56 160 1 916 8 a Estimate the industry asset beta, weighting each company by its proportion of total market value of equity b Relever the industry asset beta to reflect Kroger 's capital structure, and to make another (industry informed) estimate of Kroger 's equity beta

Question: Information regarding Kroger Company, and four industry competitors is shown below, on December 12, 2007. Company Equity beta Interest-Bearing Debt Market value equity Kroger Company

Information regarding Kroger Company, and four industry competitors is shown below, on December 12, 2007.

	Company	Equity beta	Interest-Bearing Debt	Market value equity
	Kroger Company	1.05	$ 6,674.0	$ 17,690.8
	Safeway Inc.	0.49	5,897.9	15,236.3
	Supervalu Inc.	1.17	8,936.0	8,054.3
	Whole Foods Markets	1.16	760.9	5,762.1
	Winn Dixie Stores Inc.	2.56	160.1	916.8	.



a.	Estimate the industry asset beta, weighting each company by its proportion of total market value of equity.

b.	Relever the industry asset beta to reflect Kroger's capital structure, and to make another (industry-informed) estimate of Kroger's equity beta.

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