Question
company A assets are split between a steel manufacturing division and a restaurant division that operates chain of darshinis. assume that the Steel business produces
company A assets are split between a steel manufacturing division and a restaurant division that operates chain of darshinis. assume that the Steel business produces a high operating cash flow in the market does well and low operating cash flows in the market does poorly .also assume that the restaurant is done operate cash flow is uncorrelated with the market returns butrisky. it is good in some years and poor in others all is being the same which division should have higher total is that is market or systematic risk + unique or diversify risk a.steel b.restuarant c.cant say
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