Business, 20.10.2020 01:01 Kimbeeeerly4569

We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following about these 2 firms:. Stock Price per share # shares outstanding Market Value of Debt
UPS $65 0.7 billion $ 5 billion
FedEx $55 250 million $ 3 billion
We also have the following data on the securities of these firms:.
Beta E Beta D
UPS 0.8 0
FedEx 1.1 0.1
Assume that our firm has risk-free debt with market value $20 million and equity with market value $450 million. Assume that taxes are not relevant. Please estimate our firm’s equity beta

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