Multidivisional firms are often unable to obtain an appropriate surrogate for determining the beta of a division. An acceptable alternative technique is to develop a beta through the division's accounting records. This is accomplished by: a. regressing the division's projected return on equity against the return on a major company in a similar business b. regressing the division's accounting return on equity in previous years against the return on a major stock market index c. regressing the division's projected return on equity against the historic return on a major stock market index d. none of the above
Multidivisional firms are often unable to obtain an appropriate surrogate for determining the beta of a division. An acceptable alternative technique is to develop a beta through the division's accounting records. This is accomplished by: a. regressing the division's projected return on equity against the return on a major company in a similar business b. regressing the division's accounting return on equity in previous years against the return on a major stock market index c. regressing the division's projected return on equity against the historic return on a major stock market index d. none of the above
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Multidivisional firms are often unable to obtain an appropriate surrogate for determining the beta of a division. An acceptable alternative technique is to develop a beta through the division's accounting records. This is accomplished by:
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