medium · Private Equity value-creation
When calculating the Weighted Average Cost of Capital (WACC) for a private company, an analyst unlevers a peer median beta of 1.30. The peer group has an average D/E ratio of 40% and a tax rate of 25%.
What is the unlevered beta (β_U) using the standard Hamada formula?
- 0.81
- 0.93
- 1.12
- 1.00
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