A community for students.

Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing


  • 5 years ago

For the CAPM model, what beta should I choose for a beverage company:average beta for that industry, unlevered beta or unlevered beta corrected for cash? What is the difference between these 3 betas? Thank you.

  • This Question is Closed
  1. anonymous
    • 5 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    The average beta is a regression beta, reflecting a levered beta. The unlevered beta is the beta for the entire company, including its cash holdings (cash has a beta of zero). The unlevered beta corrected for cash is the beta for just for the operating assets of the company. If you are looking for a beta for being in the beverage business, you should use the last one.

  2. Not the answer you are looking for?
    Search for more explanations.

    • Attachments:

Ask your own question

Sign Up
Find more explanations on OpenStudy
Privacy Policy

Your question is ready. Sign up for free to start getting answers.

spraguer (Moderator)
5 → View Detailed Profile

is replying to Can someone tell me what button the professor is hitting...


  • Teamwork 19 Teammate
  • Problem Solving 19 Hero
  • You have blocked this person.
  • ✔ You're a fan Checking fan status...

Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.

This is the testimonial you wrote.
You haven't written a testimonial for Owlfred.