Question

please explain how to get current debt-to-equity ratio and Asset Beta using an excel formula, thank you I rate! :)

BIU ® Format Painter Clipboard - X Font Alignme 010 for 2 Risk-free Rate (1-year T-bill yield) 3 Market Premium 4 tax rate 5 Equity Beta (BE) 6 Current Debt (MV, USD in mil) 7 Current Equity (MV, USD in mil) 8 Total Assets 9 EBIT 10 11 Current debt-to-equity ratio 12 Asset Beta (BA) 2.42% 7.50% 35% 0.472 4,796 11,903 16,699 878

Answer 1

current debt equity ratio = current MV (market value) of debt / current MV (market value) of equity

asset beta = equity beta / (1 + (1 - tax rate) * (debt equity ratio))

A в 1 Current debt $4,796 2 Current equity $11,903 3 Equity beta 0.472 4 Tax rate 35% 5 6 Current DE ratio 0.402924 7 Asset beta 0.374039

1 Current debt4796 2 Current equity 11903 3 Equity beta 0.472 4 Tax rate 0.35 6 Current DE ratio =B1/B2 7 Asset beta =B3/(1+(1-B4) *B6)