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Understanding Bloomberg Beta in Comparables Analysis

Learn about how to use Bloomberg Beta in evaluating comparables and calculating WACC. Explore regression reliability, cost of equity, cost of debt, and more. Discover practical examples and tips. Explore reliable financial websites like Google Finance, Nasdaq, and Reuters for accurate data.

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Understanding Bloomberg Beta in Comparables Analysis

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  1. Module 4 and 5 Alysha Zimmerman

  2. Introduction

  3. Comparables

  4. Bloomberg Beta

  5. Bloomberg WACC

  6. Beta • http://www.google.com 0.55 • http://www.nasdaq.com 0.93 • http://www.reuters.com 0.42 • http://finance.yahoo.com 0.15 • http://www.nyse.com 0.42 • http://www.zacks.com 0.55 • http://www3.valueline.com 0.80

  7. Regression

  8. Reliability of Beta Range = 0.15-.93 Bloomberg = 0.699 Regression = 0.715 β

  9. Cost of Equity Cost of Debt Return on the market – 8% β (Bloomberg) – 0.699 α – 0.011 ε – 0.074 rEQ = α + Rmkt*β + ε = 0.0411 + 0.08*0.699 + 0.074 = 14.13% NFL – $2,603 FEAT - $188 rD= FEAT/NFL = 188/2603 = 7%

  10. WACC Vd – $2,603 Veq – $9,936 Vent – $12,539 rEQ – 14.13% rD = 7% WACC = rD*(Vd/Vent) + rEQ*(Veq/Vent) = 0.07*(2603/12539)+ 0.1413*(9936/12539) = 0.07*.21 + 0.1413*.79 = 13%

  11. Discounted Cash Flow

  12. Questions?

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