- This topic has 3 replies, 2 voices, and was last updated 5 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
For PYQ Dec 2013 Q3 part (a) answer
Is it asset beta( business risk )reflect by risk-free rate and equity beta reflect by the cost of equity?
I don’t understand what you are writing.
The asset beta measures the risk of the business. The equity beta measures the risk of the shares – gearing in the company makes the shares more risky.
This is all explained in my free lectures on CAPM.
as answer mentioned” probably due to Nuvola Co’s higher business risk (reflected by the higher asset beta), overall the benefits from growth in excess of the risk-free rate”
which excess the risk-free rate but not cost of capital?
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘Makonis Co’ is closed to new replies.