SCAN is a multi-divisional utility company.SCAN has four divisions with the following betas and proportions of the firm's total assets:
$\begin{array}{llc}
\frac{\text { Division }}{\text { Electric \& Gas }} & \frac{\text { Beta }}{0.85} & \frac{\% \text { of Assets }}{60} \
\text { Bus transportation } & 0.95 & 10 \
\text { Real estate } & 1.40 & 25 \
\text { Recreation } & 1.15 & 5
\end{array}$
What is the firm's weighted average beta?
A) 1.01
B) 1.53
C) 0.93
D) 1.13

Question

Quizplus · Accepted Answer

Beta = 0.6(0.85) + 0.10(0.95) + 0.25(1.40) + 0.05(1.15) = 1.01

SCAN Is a Multi-Divisional Utility Company What Is the Firm's Weighted Average Beta? A) 1

SCAN Is a Multi-Divisional Utility Company What Is the Firm's Weighted Average Beta?
A) 1