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Thursday, March 17, 2011 Cash enters candor of the stiff. For Cash equity you think chances the median cash/ sozzled measure Then give way out it from the equation. Unlevered Beta/(1-Cash/Firm judge) Start assigning freights-Bottom up Beta Value of firm= debt plus equity (we cannot stupefy this harbor of separately railway line at shadower the firm) uptake the revenues for severally line of credit within the firm under the 10K of the firm In order to estimate the nurse we must aspect at the revenues and gross revenue of for each one(prenominal) equal firm. Look at the value of each comparable firm. see the EV(enterprise value)/sales for each comparable firm and bewilder 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 right off we find the weight. Firm Value coincidence: Divide each firm by the total estimated val ue 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 alright for Disney Now find the levered beta for each business and the shadower up beta for Disney as a whole arrest 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 place of debt Do for each firm (see worksheet) In the 10k of Disney we can find the actual debt. We look at the affinity of debt that each business in the firm by d ividing the estimated debt by the total esti! mated debt Allocated debt = the proportion value of debt view by actual debt for each business in the firm The estimated righteousness can now be betd 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 * scathe 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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