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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Proxy business
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
The 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
For every 100 equity, debt will be 20.