Sinaloa Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the...

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 0.93 $0 $ 3,190 Middleby's 1.88 759 7,490 National Presto 0.13 0 838 Newell Brands 1.08 11,938 26,670 Whirlpool 1.78 4,515 14,190

a. Estimate an asset beta for Sinaloa Appliance.

Solutions

Expert Solution

Please upvote if the ans is helpful. In case of doubt,do comment.Thanks.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Sinaloa Appliance, Inc., a private firm that manufactures homeappliances, has hired you to estimate the...

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)FirmBetaDebtMarket Value of EquityiRobot0.87$0$2890Middleby's1.827417,370National Presto0.070772Newell Brands1.0211,90826,070Whirlpool1.724,48513,770a. Estimate an asset beta for Sinaloa Appliance.

5. You are estimating the beta for a private firm that manufactures home appliances. You have...

5. You are estimating the beta for a private firm that manufactures home appliances. You have betas of the firm that are publicly traded that also manufacture home appliances. Firm Beta Debt MV of Equity Fedders 1.20 5 200 Maytag 1.20 540 2,250 National 0.70 8 300 The private firm has a debt/equity ratio of 25% and a tax rate of 40%. The other firms also have a tax rate of 40%. a. Estimate the beta for the private firm....

The owner of a private firm has requested that you estimate the value of the firm...

The owner of a private firm has requested that you estimate the value of the firm so that it can be marketed for sale. The firm creates custom, made-to-order furniture. The firm’s most recent results are shown in Appendix A. Furniture Company Income & FCF Analysis ($ in thousands ) Most Recent Year Revenue $ 20,000 Cost of Goods Sold 15,500 Gross Profit Margin 4,500 Gross Profit Margin % 22.5% General Operating Expenses 2,000 Depreciation & Amortization 500 Total Operating...

Appliance Center sells a variety of electronic equipment and home appliances. For the last 4 years,...

Appliance Center sells a variety of electronic equipment and home appliances. For the last 4 years, 2010 through 2013, the following quarterly sales (in $ millions) were reported. Quarter Year I II III IV 2010 5.3 4.1 6.8 6.7 2011 4.8 3.8 5.6 6.8 2012 4.3 3.8 5.7 6.0 2013 5.6 4.6 6.4 5.9 Determine a typical seasonal index for each of the four quarters

The Parker Group, a leading producer of custom home electronic accessories, has hired you to estimate...

The Parker Group, a leading producer of custom home electronic accessories, has hired you to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. Assets The stock is currently selling for $15.25 per share, and its noncallable $1,000 par value, 20-year, 7.25% bonds with semiannual payments are selling for $875.00. The beta is 1.25, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond...

KALI, Inc., manufactures home appliances that are marketed under a variety of trade names. However, KALI...

KALI, Inc., manufactures home appliances that are marketed under a variety of trade names. However, KALI does not manufacture every component used in its products. Several components are purchased directly from suppliers. For example, one of the components that KALI purchases for use in home air conditioners is an overload protector, a device that turns off the compressor if it overheats. The compressor can be seriously damaged if the overload protector does not function properly, and therefore KALI is concerned...

Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect...

Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transactions on the company's 2019 gross income assuming that the company uses any available options to defer its taxes. a. In December 2018, the company received a $1,200 advance payment from a customer for an appliance that Drake special ordered from the manufacturer. The appliance did not arrive from the manufacturer until January 2019, and Drake immediately delivered it...

You are trying to estimate the enterprise value of Firm X. Since this firm is private,...

You are trying to estimate the enterprise value of Firm X. Since this firm is private, you cannot directly estimate the firm’s cost of equity using its stock data. Fortunately, there is a similar firm, Firm Y, which is in the same industry with comparable operating risk characteristics. Assume that the CAPM holds. The risk-free rate is 2% and the market risk premium is 5%. QUESTION 1 Firm Y has a debt-to-equity ratio of 3 and it plans to keep...

Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster...

Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows: 1 Assembly Department $186,000.00 2 Test and Pack Department 120,000.00 3 Total $306,000.00 The direct labor information for the production of 7,500 units of each product is as follows: Department Assembly Test and Pack Blender 750 dlh 2,250 dlh Toaster oven 2,250 750 Total...

Economy Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing...

Economy Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost information on Economy's main products are as follows. Refrigerator $500 ($260) Range $560 ($275) Stackable washer/dryer unit $700 ($400) Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,800. The bundle price includes delivery and installation. Economy provides delivery and installation as a standalone service for any of its products for a...

Subjects