Hi
Suppose we are required to calculate the asset beta of a proxy business, but the proxy has more than 1 business stream, i read in the FM examiners report that we calculate the average asset beta.
How to calculate the avg beta ? Would appreciate if you would explain with an example. Have an exam in few days and i never came across this before
Please advice
Ask the Tutor ACCA FM
Proxy business
5y ago#1The overall beta when there are two streams is the weighted average o the betas of the individual streams, weighted by the market values of the two streams.
Could you advise what amount should we take in D/E if the question is given “DEBT TO EQUITY is 0.2”
So how much will be equity and how much will be debt??
Appreciated if advised
5y ago#3For every 100 equity, debt will be 20.
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