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 | 0.90 | $0 | $ | 3,040 | |||
Middleby's | 1.85 | 750 | 7,430 | ||||
National Presto | 0.10 | 0 | 805 | ||||
Newell Brands | 1.05 | 11,923 | 26,370 | ||||
Whirlpool | 1.75 | 4,500 | 13,980 | ||||
a. Estimate an asset beta for Sinaloa Appliance.
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