Elfu Jun 2012

Hi sir,

(i) ‘Elfu Co has 400 mil 25c shares in issue trading at 120c each.’

Am i correct if i said $100 mil (400 mil * $0.25) is the book value and $400 mil (400 mil * $1.20) is the market value…?

(ii) When calculating the component asset beta, the proportion used is 0.75 and 0.25. This is based on equity finance. Why the proportion of debt finance is not taken into consideration…?

Thanks…~