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Sleepon Hotel (Dec 2005)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Sleepon Hotel (Dec 2005)

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • November 19, 2017 at 7:21 pm #416634
    pranayluhadia
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Sir,
    In the above mentioned question why is it that the asset beta of Thrillal Inc has been kept taken as the asset beta for Sleepon Inc.
    Sleepon Inc does not only work in the Theme Park industry but Hotel Industry as well.
    Shouldn’t the asset Beta be different from that of Thrillal Inc?
    Or is that we are trying to comment on the current project and that is why we have considered Thrillal asset beta .
    Is there an assumption which is bieng missed or some requirements which I am unable to understand.
    Do let me know
    Amazed by your devotion to solving our problems.

    November 20, 2017 at 8:13 am #416809
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54726
    • ☆☆☆☆☆

    We need the asset beta of the new project, which is hotels. So we use the asset beta of a similar business in hotels.

    I do suggest that you watch my free lectures on CAPM where I explain this.

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