We have talked about "top down" regression betas and "bottom up" betas. Assume you are researching a private firm and you want to calculate the private firm's equity beta. Which of the following statements describe steps in this process? Select all the statements that are correct steps. Note that some of the necessary steps may have been omitted from the list and the order of the steps is not important.
Group of answer choices:
A. You need to lever up the asset beta at the private firm to get the equity beta at the private firm.
B. You need to unlever the equity betas at the peer firms to get their asset betas.
C. You need to find 1 or more public peer firms that compete in the same industry as the private firm. Ideally these peer firms would be of similar size and at a similar stage in the firm's life cycle.
D. You need to assume the equity beta(s) from the peer firm(s) are the same as what the equity beta would be at the private firm.
E. You need to unlever the asset betas at the peer firms to get their equity betas.