J12 Q4 a Tisca coForums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › J12 Q4 a Tisca coThis topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.Viewing 4 posts - 1 through 4 (of 4 total)AuthorPosts December 29, 2021 at 8:31 pm #645029 humaiParticipantTopics: 757Replies: 248☆☆☆☆☆Sir in this case why they have multiplied Elfu Co component asset beta with 0.25 and Elfu Co asset beta of other activities with 0.75? December 30, 2021 at 8:12 am #645042 John MoffatKeymasterTopics: 57Replies: 54700☆☆☆☆☆According to the question, 75% of Elfu’s equity is in ‘other activities’ and so 25% is in ‘component production’. It is being assumed sensibly that it is the equity that is carrying the risk. December 30, 2021 at 10:55 am #645060 humaiParticipantTopics: 757Replies: 248☆☆☆☆☆Instead of equity can we also assume debt carrying the risk and so use 20% and 80%? December 30, 2021 at 4:14 pm #645080 John MoffatKeymasterTopics: 57Replies: 54700☆☆☆☆☆No. In theory debt is risk free. It is equity that carries the risk.AuthorPostsViewing 4 posts - 1 through 4 (of 4 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In