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Sir, in the question Morada, I want to know why the repair and maintenance service was taken to be 30% and the travel service was 70% when calculating the asset beta under the second director’s proposal. I can’t seem to find anywhere in the question that tells us the percentage of both parts.
It is because the proposal says that the book value of the non-current assets will reduce by 30% is the the repair and maintenance business are sold (leaving therefore the travel services to be 70%).
Later, under ‘other financial information’ the question says that the proportion of the book value of the non-current assets gives a fair representation of the size of each business unit.
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