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  • Task5 Calculations

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    Vaibhav Raulkar
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    The document provides sample data to calculate the average unlevered asset beta for the energy utilities sector. It lists the market capitalization, debt, observed company beta, and debt-to-equity ratios for two energy companies. It then shows the calculations to derive the unlevered beta for each company based on a 27% tax rate. The unlevered betas are averaged and the document reports the average unlevered asset beta for the energy utilities sector is 0.58.

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    The document provides sample data to calculate the average unlevered asset beta for the energy utilities sector. It lists the market capitalization, debt, observed company beta, and debt-to-equity ratios for two energy companies. It then shows the calculations to derive the unlevered beta for each company based on a 27% tax rate. The unlevered betas are averaged and the document reports the average unlevered asset beta for the energy utilities sector is 0.58.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    10 views2 pages

    Task5 Calculations

    Uploaded by

    Vaibhav Raulkar
    The document provides sample data to calculate the average unlevered asset beta for the energy utilities sector. It lists the market capitalization, debt, observed company beta, and debt-to-equity ratios for two energy companies. It then shows the calculations to derive the unlevered beta for each company based on a 27% tax rate. The unlevered betas are averaged and the document reports the average unlevered asset beta for the energy utilities sector is 0.58.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    #VALUE!

    Calculate the average unlevered asset beta (as observed) for energy utilities sector using the following sample data
    Assume that the marginal tax rate for all companies is 27%

    District
    Power Energy Freedom
    Market capitalization 8,015 3,283
    Estimated value of net debt 6,666 2,483
    Company beta (as observed) 0.84 0.96

    Workings

    Company Beta Adjusted Beta Tax rate D/E ratio Unlevered beta
    District 0.84 0.27 0.83 0.52
    Energy 0.96 0.27 0.76 0.62
    Powerward 0.87 0.27 1.01 0.50
    Poweu r 1.03 0.27 0.76 0.66

    Average 0.58

    Unlevered beta

    District 0.52
    Powerward 0.50
    the following sample data

    Powerward Poweur
    9,557 3,662
    9,644 2,767
    0.87 1.03

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