Estimate equity beta for their common stock

Assignment Help Financial Management

Reference no: EM131980692

Terlingua Energy Resources is a privately held, all equity firm. Managers at Terlingua need to estimate equity beta for their common stock. Here is data on four competitors. The four companies are publicly traded, all equity firms.

Company Beta Book value of equity ($ million) Share price ($) Shares outstanding (millions)

Hallibuddy Co. 1.15 500 17.44 40

Schlumbertime Ltd. 1.30 1,000 66.71 30

Felix Energy Inc. 1.50 750 62.5 25

Suferior Energy Co. 1.75 2,000 76.98 20

Estimate the Terlingua’s equity beta using the best procedure described in the lecture. Do not round at intermediate steps in your calculation. Express your answer in decimal form. Round to two decimal places.

Reference no: EM131980692

Questions Cloud

Find current share value if dividends are expected to grow : Find the current share value if dividends are expected to grow by $0.10 per year indefinitely.

Deposit in the retirement account : how much Mr. Guardiola should deposit in the retirement account each year for the next 40 years?

Market value of the company to its bondholders-shareholders : What is the market value of the company to its bondholders and shareholders?

What is your portfolio return for the year : your investment in Apple has 6% total return, while your investment in Boeing as 3% total return. What is your portfolio return for the year?

Estimate equity beta for their common stock : Terlingua Energy Resources is a privately held, all equity firm. Managers at Terlingua need to estimate equity beta for their common stock.

Statements involving the promised return on loan : Which of the following statements involving the promised return on a loan is NOT true?

What are project discounted payback-NPV-IRR : What are the project’s discounted payback, NPV, IRR, and MIRR?

What is after-tax cost of debt for caldwell : Income for Caldwell Instruments is sufficiently high that if it increases its income by adopting a new project, What is the after-tax cost of debt for Caldwell?

What is most money you can make on this position : What is the most money you can make on this position? How far can the stock price move in either direction before you lose money?

User Account

All Pages