Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Tisa June 2012
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John Moffat.
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- November 29, 2014 at 8:14 pm #214507
Hi
A part i
In the solution, after the asset beta of the other activities asset beta has been solved to be 1.078, the component asset beta is then solved using weighting of .75 and .25
Where are these weight is derived from?Thanks
November 30, 2014 at 8:02 am #214602The question says that 75% of the equity is in non-component (so the other 25% is in components)
November 30, 2014 at 8:57 am #214641Ok, it also says that ‘80% of the debt finance….can be attributed to other activities’
Is debt finance to be ignored when weighting asset betas between components/products?November 30, 2014 at 9:07 am #214649Yes – the current examiner uses the equity finance on the basis that it is the equity carrying the risk.
November 30, 2014 at 9:25 am #214659Ok great, thanks a lot for the reply & all your help 🙂
November 30, 2014 at 2:57 pm #214747You are welcome, Brian 🙂
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