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June 2012 Q4 A

This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.

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February 25, 2016 at 3:35 am #301931
kurtlan
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John, I am having issues following how the calculated the Asset Beta to be used.

Specifically the last step where the computed the “Component Asset Beta”. Not sure where they got the 25% and 75% from.

regards
February 25, 2016 at 10:14 am #301986
John Moffat
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It is because the question says that 75% of the equity is attributed to other activities and therefore 25% is components.
The overall asset beta is then the weighted average of the individual betas.
February 25, 2016 at 5:47 pm #302051
kurtlan
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Thanks or the response. it was steering me right in my face all the time.
February 25, 2016 at 8:08 pm #302078
John Moffat
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No problem 🙂
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