Comparable companies tax rate debtequity ratio equity beta


Information about a private company and its publicly traded competitor:

Comparable companies Tax rate (%) Debt/Equity ratio Equity beta Private company 40 1.00 NA Public company 35 0.85 1.75

Using the pure-play method, what is the estimated equity beta for the private company? Please show all work.

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Financial Management: Comparable companies tax rate debtequity ratio equity beta
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