Hi,
In calculating the beta for the project can you please explain how they have come to the below calculation?
0.89 = PAB X 0.15 + 0.80 X 0.85
PAB = 1.4
I calculated the 0.89. But I don't understand the remaining calculation.
Many thanks
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Nahara co and Fugae Dec 14
9y ago#1The question says that 15% of Reka's business is in the luxury market (and therefore 85% is in the non-luxury market).
The overall beta of 0.89 is the weighted average of the betas of the two different markets.
(I recorded lectures working through the whole of this question. You can find them linked from this page:
https://opentuition.com/acca/afm/afm-revision-lectures/ )
Hi John.. I didn't get the part where Lumi's offer is considered. How to get $30.8m? How come they arrive at 1463450?
8y ago#3If you watch my lecture working through this question then you will see the answer to your question. The link to it is above.
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