To obtain the beta for Disney, we have to estimate each
business’s weightin relationto Disneyasa company.The
valueforeachofthedivisionswasestimatedbyapplyingthe
typicalrevenuemultipleatwhichcomparablefirmstradeto
the revenue reported by Disney for that segment in 2003.
35 The unlevered beta for Disney as a company is a
value-weightedaverageofthebetasofeachofthedifferent
business areas. The following table summarizes this
calculation.
Theequity beta canthenbe calculated usingthe financial
leverage for Disney as a firm. Combining a marginal tax rate
36 of37.3%,themarketvalueofequityof$55,101million,
and an estimated market value of debt of $14,668 million,
37 we arrive at the beta for Disney in early 2004: