The ____ method consists of regressing historical values of a division's return on equity against the return on a major stock market index.
A)accounting beta model
B)CAPM
C)overlay
D)pure play

Question

Quizplus · Accepted Answer

The accounting beta model involves regressing a division's historical return on equity against the return on a major stock market index to estimate the division's beta, rather than using market betas directly. This method is particularly useful for divisions of a company that are not publicly traded and therefore do not have a directly observable market beta.

The ____ Method Consists of Regressing Historical Values of a Division's