Schweser Volume 2 Exam 3 Question 8B ask, should, overall

AnalystForum

They ask to calculate overall WACC of the firm, so I used the Beta of 0.5. So looks to me that if the "OVERALL" WACC has to be computed, we should just use the operating asset Beta?

Darien

Yeah, use operating asset beta.

NO EXCUSES

justin88

Thanks for the reply. Also, in one of the EOC questions, where they ask to compute the total asset (operating) Beta, I see that the pension asset Beta is also included in this total.

But when we compute the operating asset WACC, we just take the Beta of the operating assets. Of course, this Beta is adjusted for the pension assets.