Question
Hologram Corporation is a holding company with four main subsidiaries. The percentage of its business coming from each of the subsidiaries, and their respective betas,
Hologram Corporation is a holding company with four main subsidiaries. The percentage of its business coming from each of the subsidiaries, and their respective betas, are as follows:
| Subsidiary | Percentage of Business | Beta |
| Water Company | 60% | .70 |
| Cable Company | 25% | .90 |
| Real estate | 10% | 1.30 |
| Technology companies | 5% | 1.50 |
What is the companys beta?
Assume that the risk-free rate is 6% and that the market risk premium is 5%. What is the holding companys required rate of return?
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Financial Statement Analysis
Authors: Andrew P.C.
1st Edition
1520985002, 978-1520985008
