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Estimate firm equity beta

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Reference no: EM132410938

We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following about these 2 firms:

Stock Price per share# shares outstandingMarket Value of DebtUPS$650.7 billion$ 5 billionFedEx$55250 million$ 3 billion

We also have the following data on the securities of these firms:

Beta EBeta DUPS0.80FedEx1.10.1

Assume that our firm has risk-free debt with market value $20 million and equity with market value $450 million. Assume that taxes are not relevant. Please estimate our firm's equity beta.

Reference no: EM132410938

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