Enterprises is all-equity firm with two divisions

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Reference no: EM132040837

Weston Enterprises is an all-equity firm with two divisions. The soft drink division has an asset beta of 0.75, expects to generate free cash flow of $53.6 million 1 year from today, and anticipates a 3% perpetual growth rate. The industrial chemicals division has an asset beta of 1.02, expects to generate free cash flow of $74.8 million 1 year from today, and anticipates a 1.84% perpetual growth rate. Suppose the risk-free rate is 4% and the market risk premium is 5%. Estimate Weston’s current equity beta. Round your answer to two decimal places.

Reference no: EM132040837

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