### Estimate the unlevered beta for time warner

Assignment Help Finance Basics
##### Reference no: EM13880248

2.It is 1996 (humor me). Time Warner Inc., has a beta of 1.75. Part of the reason for the high beta is the debt left over from the leveraged buyout of Time by Warner in 1989 with debt amounting to \$10 billion in 1995. The market value of equity was also \$10 billion in 1995. The firm's marginal tax rate is 40%.

Estimate the unlevered beta for Time Warner.

Estimate the effect of reducing the debt/equity ratio (at market value) by 10% each year for the next two years on the beta of the stock.

### Previous Q& A

#### Start paying dividends in the near future

Alphabet class C stock will start paying dividends in the near future because of all of the cash flow that it generates (coupled with a nearly \$70 billion cash balance). When pressed on the issue, Frank made a forecast that Alphabet will start paying..

#### Select a company with long term bonds outstanding

Select a company with long term bonds outstanding. There are many examples in the textbook. Locate and analyze a current quotation for that bond. Use figure 10.2 in the textbook as a guide. Compare the current price with the par value. Explain at lea..

#### What if a cash disbursement was posted to the wrong vendor

What if a cash disbursement was posted to the wrong vendor? Identify internal controls that would detect or prevent this from occurring.

#### Strategy-analysis and evaluation - clif

Based on Strategy-Analysis and Evaluation, first of all I need all the preliminary research work on the company - Clif

#### Which age group has the worst accident record

An analyst points out that of 57,051 drivers involved in accidents last year, drivers aged 31 to 55 accounted for 24,265 cases, or some 43 percent of the total-a far greater proportion than any other age group. Should one conclude that this age gr..

#### Which week was his sales more

A shopkeeper sold 56 bulbs out of 80 in the first week ,and 75 out of 100 in the second week. Which week was his sales more?

#### What are the three standard parts of an edi data

What are the three standard parts of an EDI data transmission?

#### How did emerging technology change american art

How did emerging technology change American art? How does it continue to change? Do you think the effects of technology have been positive or negative?

#### Who use e-commerce, along with controls to prevent

Identify two of the biggest risks to companies who use E-commerce, along with controls to prevent these risks.

#### Current yield with semi annual payments

A bond that matures in 9 years sells for \$950. The bond has a face value of \$1,000 and a yield to maturity of 9.8764%. The bond pays coupons semi annually. What is the bond's current yield?

### Similar Q& A

#### What is the expected return of your portfolio

You have invested 30 percent of your portfolio in Jacob Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.07, 0.17, and 0.13, res..

#### How much of the first payment goes toward principal

Prepare an amortization table for the first six months of the traditional 30 year-mortgage.

#### What is the initial requirement

In the previous problem, suppose you sell the stock at a price of \$42. what is your return? what would your return have been had you purchased the stock without margin? what if the stock price is \$34 when you sell the stock?

#### Make an amortization schedule

On January 1, Year 1, a company issued \$200,000 bonds and received \$210,483 from investors. The stated rate of interest is 10% and the market rate of interest is 8 percent.

#### Julia owns a building worth 800000 she insures the building

what is the meaning of the term reinsurance?explain the reasons for reinsurance.explain the term securitization of

#### During the year ended december 31 2014 schmelya corporation

during the year ended december 31 2014 schmelya corporation incurred the following infrequent lossesa factory was

#### Determine the value of the stock

The Lo Company earned \$ 2.60 per share and paid a dividend of \$ 1.30 per share in the year just ended. Earnings and dividends per share are expected to grow at a rate of 5 percent per year in the future. Determine the value of the stock.

#### The market price by the end of the year is expected to be

stock valuation-single period. mary czech is considering the purchase of stock x at the beginning of the year. the

#### Oxo value proposition what value proposition does oxo

oxo value proposition. what value proposition does oxo provide to these customers? is this value proposition

#### Your firm must raise capital immediately and debt will be

suppose you believe that the economy is just entering a recession. your firm must raise capital immediately and debt

#### How much return will his investment earn during time period

Mr. Nailor invests \$28,000 in a money market account at his local bank. He receives annual interest of 7% for 6 years. How much return will his investment earn during this time period.

#### What happens to the npv

What happens to the NPV