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Hi, I didn’t quite understand the calculation in answers for Weighted average Beta=(0.72*(150/150+60)+(0.88*(60/150+60)=0.77.
Could we just calculate as follow:
Outdoor business 40%*0.88(Ba for outdoor)=0.352
Garden business 60%*0.72(Ba for garden)=0.432
Weighted average =0.78
Currently they have $150M invested in garden centres and intend to invest $60M in outdoor shops. So the total invested will be $210M. Therefore the proportion invested in garden centres will be 150/210 and the proportion invested in outdoor shops will be 60/210.