Use the equation to find unlevered beta

Assignment Help Financial Management

Reference no: EM13937126

Unlevered beta Harley Motors has $14 million in assets, which were financed with $2.8 million of debt and $11.2 million in equity. Harley's beta is currently 1.65 and its tax rate is 30%. Use the Hamada equation to find Harley's unlevered beta, bU. Round your answer to two decimal places.

Reference no: EM13937126

Questions Cloud

Equity-shares of common stock outstanding : Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 11%. They had 20-year terms and $1,000 face values. They are now selling to yield 9%. Equity: Great Corp has 108,000 shares..

Decided to enter the mortgage brokerage business : Jennifer McAfee recently received her university Master’s degree and has decided to enter the mortgage brokerage business. Rather than work for someone else, she has decided to open her own shop. Her cousin Finn has approached her about a mortgage fo..

New project analysis-evaluate a proposed spectrometer : You must evaluate a proposed spectrometer for the R&D department. The base price is $280,000, and it would cost another $70,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold aft..

Replacement analysis-What is the NPV of the project : Mississippi River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings before depreciation from $30,000 to $44,000 per year. What is the NPV of the project?

Use the equation to find unlevered beta : Unlevered beta Harley Motors has $14 million in assets, which were financed with $2.8 million of debt and $11.2 million in equity. Harley's beta is currently 1.65 and its tax rate is 30%. Use the Hamada equation to find Harley's unlevered beta, bU.

What is the equipments after-tax salvage value : After tax salvage value Kennedy Air Services is now in the final year of a project. The equipment originally cost $33 million, of which 75% has been depreciated. Kennedy can sell the used equipment today for $8.25 million, and its tax rate is 35%. Wh..

Division is considering two projects with the cash flows : NPV Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$19 $8 $15 $17 Project B -$17 $11 $8 $6 a.What are the projects' NPVs assuming the WACC is 5%?

Discounted payback : Project K costs $70,000, its expected cash inflows are $16,000 per year for 8 years, and its WACC is 13%. What is the project's discounted payback?

What is the per-share value of van buren : Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 3% and the market risk premium is 6%. What is the per-share value of Van Buren to Harrison Corporation?

User Account

All Pages