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- 2011-7-2
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16#
发表于 2011-7-13 12:05
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1morelevel Wrote:
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> If you reallocate more to the pension equity, the
> firm risk has increased and its stock will be more
> volatile. So with all else being equal, equity
> beta would increase.
>
> I think what you are remembering from the book is
> the chart that showed the required change in the
> capital structure needed to OFFSET the changes in
> pension assets to maintain the equity beta.
>
> For instance, if they rebalance to more equity in
> the pension, the company would need to delever, ie
> pay down debt or raise equity to maintain the
> equity beta at the same level.
>
> Vice versa if they allocated more pension assets
> to fixed income, the firm risk would decrease and
> equity beta would fall. If they wanted to
> maintain the equity beta, they should add more
> risk to the operating balance sheet, ie buyback
> stock or issue more debt.
That is what I mean, I view this is a swift process, you don't want to let the equity beta change, so asset beta is the one to change. |
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