Ask about Nokia company

Estimating relative risk

b. Based on your companys business mix, estimate a bottom up beta for your companys operating businesses. You should be able to find the breakdown by business in your companys financial filings, though the details are richer in some than others. To get the beta for each business, you will need to find other publicly traded companies that operate primarily in that business, average their betas and correct for financial leverage and cash holdings.

• Break down your firm by business components, and estimate a business beta for each component
• Attach reasonable weights to each component and estimate an unlevered beta for the business.
• Using the current leverage of the company, estimate a levered beta for each component.