As of september 2012 goog has no debt suppose the firms, Ask an Expert

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As of September 2012, GOOG, has no debt. Suppose the firm's managers are considering issuing zero-coupon debt due in 16 months with a face value of 163.5$ and using the proceeds to pay a special dividend. Google currently gas a market value of 229.2 billion and the risk free rate is 0.25%. Using an implied volatility of 38.60% answer the following:

a) If Google's current equity beta is 1.20 estimate Google's equity beta after the debt is issued.

b) Estimate the beta of the new debt.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92782236

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