levbeta - Output from the Analysis Unlevered Beta for the...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Sheet1 Page 1 Betas and Leverage These inputs are absolutely essential to the calculation. Enter the current beta of the company = 1.40 Enter the marginal tax rate for the company = 36% Enter the average debt/equity ratio over the period of the regression = 14% The following inputs are useful for the re-estimation of the beta, if the current D/E ratio is different from the average. Enter the current market value of equity in the company = $50,889 Enter the current book value of debt in the company = $12,342 Enter the average maturity of the debt in the company = 5 Enter the interest expenses from the most recent 12 months = $876 Enter the current market interest rate on this company's debt = 7.50% Market Value of Debt = $12,142 Enter the estimated debt value of the firm's operating leases
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Output from the Analysis Unlevered Beta for the firm (based upon average debt/equity ratio) = 1.28 Current Beta for the firm (based upon current debt/equity ratio) = 1.48 (only if you enter the current value inputs) Debt to Capital Debt/Equity Ratio Beta Effect of Leverage 0.00% 0.00% 1.28 0.00 10.00% 11.11% 1.38 0.09 20.00% 25.00% 1.49 0.21 30.00% 42.86% 1.64 0.35 40.00% 66.67% 1.83 0.55 50.00% 100.00% 2.11 0.82 60.00% 150.00% 2.52 1.23 70.00% 233.33% 3.20 1.92 80.00% 400.00% 4.57 3.29 90.00% 900.00% 8.69 7.40 Customized Inputs Enter the debt/equity ratio that you think the firm will have = 35% Levered Beta based upon this debt/equity ratio = 1.57...
View Full Document

This note was uploaded on 01/29/2012 for the course FIN 6000 taught by Professor Banko during the Fall '11 term at University of Florida.

Ask a homework question - tutors are online