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How is the %mcap and weighted beta calculated? I am having trouble figuring this out. Question You have been asked to estimate the beta of

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How is the %mcap and weighted beta calculated? I am having trouble figuring this out.

Question You have been asked to estimate the beta of General Electric that has four primary divisions with the following characteristics: Division Segment-average Unlevered Market Value Beta (Peer Firms) Aviation 1.25 S12 billion Energy Infrastructure 1.41 $18 billion Power and Water 0.58 S9 billion Oil & Gas 1.31 $11 billion What is the fundamental unlevered beta of General Electric based on the above information? a) 1.14 b) 1.20 c) 1.28 d) 1.35 Solution: Peer betas 1.25 Meap 12 %mcap 0.24 Weighted Beta 0.3 1.41 0.58 1.31 18 9 11 0.36 0.18 0.22 0.5076 0.1044 0.2882 1.2002

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