mar350

I'll let this one be. Thanks for the input fellas (assuming), my mental block is still somewhat hung up on the point WorldsGreatest made about betas not changing despite capital structure. I see what both of you are saying and it makes sense that equity beta is spread over a larger asset base with pensions included.

I don't like the fact that "pension asset beta is known." Just a minute ago before we added pension assets, operating asset beta was known. Now suddenly we are recalculating it. ARGH!!!!

I can follow the steps and even see the big picture of why it makes sense that WACC goes down. But this little step in the calculations is just not getting me to "ah ha" land. Ah well, sometimes you have to muscle through without 100% understanding.

Thanks for your time, now get back to studying. I already feel bad taking the amount of time I have! Best of luck.