Estimate the Minimum NPV Assignment | Homework For You
January 29th, 2020
Problem 6 (10%) that Sears has an equity beta of 1.36, a debt beta of 0.17, and a debt-equity ratio of 0.20 while Saks had an equity beta of 1.85, a debt beta of 0.31, and a debt-equity ratio of 1.0.
estimate the minimum NPV such that a new $1 million investment will benefit shareholders. Which firm has the more severe debt overhang problem?
(2) Why should firms estimate the debt overhang problem? Why do you estimate the minimum NPV? Get Finance homework help today