You need t estimate the equity beta for golden chemical inc, Ask an Expert

Finance

You need t estimate the equity beta for Golden Chemical inc, Golden's debt-to-asset ratio is 20% and it debt is 0.25. the following table shows the debt betas and the debt-to-equity ratios for three comparable chemical firms. assume the tax rate is 40% for all four firms

company beta d/e ratio debt beta

Eastman chemical 1.45 0.75 0.3

Celanese corp 1.28 0.82 0.3

Down chemical 2.56 0.96 0.3

A. Assuming debt is risk -free, use the infromation given above to estimate the unlevered equity of each of these companies

B. Assuming debt is risk free, what is your estimate of Golden Chemical level equity beta?

C. The current risk free rate is 2.4% and the current market risk premium is 7.53%. If Golden before tax cost of de and it is 6.8% and 6.8% and has no preferred stock in its capital structure, what is Golden weighted average cost of capital?

View complete question

Financial Management, Finance

Category:- Financial Management
Reference No.:- M93053074

Have any Question?Write your Review or question?

Related Questions in Financial Management

Project risk finance and monitoring assignment -

Project risk, finance, and monitoring Assignment - Report Assessment Description - In this assessment in Part A students are asked to imagine they have been engaged by an external client to develop a report on key aspect ...

Assignmentnow that you have gained an understanding of red

Assignment Now that you have gained an understanding of Red Carpet, Leroy has asked you to join in on a preliminary meeting with the VP of HR and other members of the organization to discuss change. The meeting was very ...

International financial management assignment -this

International Financial Management Assignment - This assignment consists of two parts, Part A and Part B. PART A - Assignment Question - As a recent graduate of Afin 867 you have been lucky enough to be offered a consult ...

As we learned about in our lecture there are three types of

As we learned about in our lecture, there are three types of exercise: Aerobic exercises, e.g. running, cycling, walking, and skiing, are performed for longer intervals and require oxygen. Aerobic exercise primarily uses ...

International finance assignment -there have been several

International Finance Assignment - There have been several currency crises over the past few decades, including the Asian Financial Crisis. Discuss and present a timeline outlining the important issues surrounding the cu ...

Please respond in about 100 words for each question belowis

Please respond in about 100 words for each question below: Is it really so important for us to be aware of the various styles, the personal behaviors, and the Face to Face communications, at the table? Can it "make or br ...

Process improvement projectfor this assignment select

Process Improvement Project For this assignment select either your own organization or an organization about which you know enough to review the supply chain processes and identify a process that can be improved in your ...

This week you are to research the issue of healthcare

This Week, you are to research the issue of healthcare charging and develop a charging policy for a healthcare institution that reflects current market trends. You should consider various methods of establishing this pol ...

Launching a new product linefor this portfolio project

Launching a New Product Line For this Portfolio Project Option, you will act as an employee in a large company that develops and distributes men's and women's personal care products. The company has developed a new produ ...

1 comparative advantagethe following chart represents the

1. Comparative Advantage The following chart represents the production capabilities of the US and Japan:. Output per worker- day Country Food Clothing US 2 1 Japan 3 9 a) Which country has an absolute advantage in fo ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Financial Management Expert