Question
ATT (the phone company) had a beta of .57 before it bought Warner Brothers Studios (a content maker and television show producer) with a beta
ATT (the phone company) had a beta of .57 before it bought Warner Brothers Studios (a content maker and television show producer) with a beta of 1.11 . When doing the analysis for the acquisition of Warner should ATT use it own beta of .57 in calculating the cost of capital for the acquisition or should it have used the 1.11 beta for Warner Brothers Studios? Why?
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The Handbook Of Credit Risk Management
Authors: Sylvain Bouteille, Diane Coogan-Pushner
2nd Edition
1119835631, 978-1119835639
