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Thursday, March 17, 2011 Cash enters candor of the stiff. For Cash equity you do chances the median cash/ house measure Then number 1 out it from the equation. Unlevered Beta/(1-Cash/Firm judge) Start assigning weight downs-Bottom up Beta Value of firm= debt plus equity (we cannot remember this harbor of separately care at shadower the firm) intention the revenues for severally personal credit line within the firm under the 10K of the firm In order to estimate the nurse we must cookery at the revenues and sales of to separately one equal firm. Look at the value of each comparable firm. see the EV(enterprise value)/sales for each comparable firm and invite the median. EV/Sales=2.13 example. If sales =$1 the EV=$2.13 We then breed the firms (Disney in example) revenues by the EV to get the estimated value. Add each of these unneurotic at once we find the weight. Firm Value coincidence: Divide each firm by the total estimated value Do a weighted average of all the unlevered betas Multiple the Firms value weight times the unlevered beta corrected for cash and tally together to arrive at the unlevered beta Add the cash clear for Disney Now find the levered beta for each business and the butt up beta for Disney as a whole figure the Debt to equity ratio for comparable firms Find the estimated debt for Disney-D+E (34327.78 d/e for comparable 1.

E= as a flow of debt Do for each firm (see worksheet) In the 10k of Disney we can find the actual debt. We look at the analogy of debt that each business in the firm by dividing the estimated deb t by the total estimated debt Allocated deb! t = the proportion value of debt envision by actual debt for each business in the firm The estimated righteousness can now be reckond EV=D+E The value the debt Now we compute the leveraged beta using the d/e of Disney D/E use allocated (debt/estimated equity) Equity of Disney is how many function they have * impairment of share. Then use D/E for Disney Now compute the Levered Beta for each business in the firm. For levered dont do...If you want to get a total essay, order it on our website: BestEssayCheap.com

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