Estimation of Beta of a Stock-Multiple Choice Question
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Question
You are evaluating a new project and need an estimate for your project's beta. You have identified the following information about three firms with comparable projects:
|
Firm Name |
Equity Beta |
Debt Beta |
Debt to Equity Ratio |
|
Franklin |
1.25 |
0 |
0.25 |
|
TXR |
1.6 |
0.2 |
1 |
|
Sempcor |
2.3 |
0.3 |
1.5 |
The unlevered beta for Sempcor is closest to:
A) 1.00
B) 0.90
C) 0.95
D) 1.10
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