Estimate the beta of the new debt

Assignment Help Financial Management

Reference no: EM131943580

As of September 2012, GOOG, has no debt. Suppose the firm's managers are considering issuing zero-coupon debt due in 16 months with a face value of 163.5$ and using the proceeds to pay a special dividend. Google currently gas a market value of 229.2 billion and the risk free rate is 0.25%. Using an implied volatility of 38.60% answer the following:

a) If Google's current equity beta is 1.20 estimate Google's equity beta after the debt is issued.

b) Estimate the beta of the new debt.

Reference no: EM131943580

Questions Cloud

What do think should be done to make standard enforceable : It is important for professionals to conduct themselves according to their discipline's standards to promote the general good of the discipline.

Discuss the primary function of the organization : Please review your respective website and discuss the primary function of the organization and identify professional standards of practice discussed.

How managers can create value for their firm : What are some of the advantages and disadvantages associated with a firm's expansion into international markets?

Summarizing the relevant points of the article : In 750-1,000 words, identify and describe the issues affecting standards of practice related to competency of medical care identified in the Lyckholm.

Estimate the beta of the new debt : If Google's current equity beta is 1.20 estimate Google's equity beta after the debt is issued. Estimate the beta of the new debt.

Amount of interest paid : Amount of 'Interest paid' during year 3 (rounded to nearest dollar) Amount of 'Principal paid' during year 3 (rounded to nearest dollar)

Provide a succinct summary of the main points of proposal : 32144 Technology Research Preparation Assessment - Professional Stream Project Proposal. Provide a succinct summary of the main points of your Proposal

How many patients you may be getting : Your hospital has been placed on alert for receiving patients from a local explosion at a large factory. Reports from the scene are spotty in terms of numbers.

Calculate its current cash conversion cycle : Its cost of goods sold is 75% of sales. Calculate its current cash conversion cycle based on the available information.

User Account

All Pages