Reading 36: Return Concepts- LOS e～ Q1-3 companies, public, growth, market

wzaina

 

LOS e: Discuss beta estimation for public companies, thinly traded public companies, and nonpublic companies.

Q1. Adjusted beta for public companies compensates for:

A)   drift.

B)   leverage.

C)   changes in the market’s growth rate.

 

Q2. In the process of estimating beta for a private company, unlevering the beta calculated for the publicly traded comparable company accomplishes what goal?

A)   Establishing a baseline level of leverage.

B)   Improving the accuracy of the estimate in the event that the private company’s debt is of low quality.

C)   Isolating market risk.

 

Q3. There is a multistep process used to estimate the beta of nonpublic companies. What extra step must be taken to use the process on thinly traded public companies?

A)   Beta must be reduced using a liquidity factor.

B)   No extra step must be taken.

C)   Beta must be adjusted to reflect debt and equity levels.

elea0930

aac

danforth

dd

梅子绿茶

 aa

annyyu

re

梅子绿茶

 aa

vanisacarlton

thanks

梅子绿茶

 aa

沙胖胖

thanks

suodi

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