SCAN is a multi-divisional utility company. SCAN has four divisions with the following betas and proportions of the firm's total assets:
What is the firm's weighted average beta?
A) 1.01
B) 1.53
C) 0.93
D) 1.13

Name: SCAN is a multi-divisional utility company. SCAN has four divisions with the following betas and proportions of the firm's total assets: What is the firm's weighted average beta? A) 1.01 B) 1.53 C) 0.93 D) 1.13
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Question

SCAN is a multi-divisional utility company. SCAN has four divisions with the following betas and proportions of the firm's total assets: 
What is the firm's weighted average beta?
A) 1.01 
B) 1.53 
C) 0.93 
D) 1.13

Quizplus · Accepted Answer

Solution:
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