As we all know that when a Co intends to enter into a new industry we are required to calculate the risk adjusted WACC. For this purpose we calculate the Beta Asset of that industry and then regear it with our Co's financial gearing to calculate the Risk adjusted Beta Equity in order to compute the new Ke and ultimately WACC.
Beta Asset represents the Business Risk faced by the Co. in that industry. My query is that why don't we calculate the Proxy Beta Asset as the Co. is already doing business in some other industry. So it must be facing some Business Risk in that industry and is bound to have a Beta Asset of its existing industry.