anonymous
  • anonymous
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.
Finance
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anonymous
  • anonymous
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.
Finance
chestercat
  • chestercat
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anonymous
  • anonymous
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.

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