answered question
0
Votes
Votes
1
Answer
Answer
M$0.25
Is Beta an Adequate Measure of Risk for a Private Firm?
answers (1)
Beta measures the risk added on to a diversified portfolio. The owners of most
private firms are not diversified. Therefore, using beta to arrive at a cost of
equity for a private firm will
a) Under estimate the cost of equity for the private firm
b) Over estimate the cost of equity for the private firm
c) Could under or over estimate the cost of equity for the private firm
private firms are not diversified. Therefore, using beta to arrive at a cost of
equity for a private firm will
a) Under estimate the cost of equity for the private firm
b) Over estimate the cost of equity for the private firm
c) Could under or over estimate the cost of equity for the private firm
Voted "No best answer": keepontryin, shinju, buddawiggi,
Related questions
140 characters left
ask any question
Nevertheless, we welcome you to Mahalo and look forward to your contributions.