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Say that Tesla's revenues prior to 2018 came 100% from auto sales. Then in 2018 the company bought Solar City. Today the company's revenues are
Say that Tesla's revenues prior to 2018 came 100% from auto sales. Then in 2018 the company bought Solar City. Today the company's revenues are 50% from auto sales and 50% from solar energy products, and this revenue mix is expected to remain constant in the future. The average beta for automotive companies is 0.7 while the average beta for solar energy producers is 1.5. If all these statements were true and you were asked to calculate Tesla's beta in 2020, what time period would you use for your calculations? Why?
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