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Forums › ACCA Forums › ACCA FM Financial Management Forums › CAPM
To calculate beta equity, we will need the market value of both debt and equity. Do I need to include retained earning as the total of equity? Or only ordinary shares?
Thanks in advance!
ordinary shares
The market value already effectively includes retained earnings (it is the most obvious reason of all for the market value being higher than the nominal value on the statement of financial position).
So you do not add on retained earnings when using market values.
Thanks a million John! Now it’s cleared 🙂
Great 🙂