[abc528]

Thank you so much. I will review all the lectures.

[abc528]

Thank you Sir.
I have reviewed the lectures and here is a new question. I am sorry.

The question is:
In the lecture “CAPM and MM Combined”, I could understand your teaching, but I feel weird about the formula.

To be simple,
WACC=(E/V * ke) + [D/V * kd * (1 – Tc)], WACC is the comprehensive cost including the ke and kd, that is, considering the gearing effect.

However, in the ungeared beta,
beta of asset = proportion1 * beta e + proportion2 * beta d, ( beta d = 0 usually)
why the beta of asset does not include the gearing effect?

Thank you for your reply in advance.

[abc528]

Thank you sir.
Further to my Question 2, “An efficient capital market does not reward people for bearing risk that rational investor would eliminate by diversification.” so bearing unsystermatic risk, for example, buying one share in the market, could not get extra return.
Is it correct?

[abc528]

Thank you Sir!

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