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An Observation on Estimating the Systematic Risk of an Industry Segment

Roy L. Crum and Keqian Bi
Financial Management
Vol. 17, No. 1 (Spring, 1988), pp. 60-62
Published by: Wiley on behalf of the Financial Management Association International
Stable URL: http://www.jstor.org/stable/3665916
Page Count: 3
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
An Observation on Estimating the Systematic Risk of an Industry Segment
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Abstract

The need to define appropriate costs of capital for different risk segments of a corporation's portfolio of businesses is recognized as an important issue in financial management. In practice, however, the problem of assessing multiple risk-adjusted hurdle rates may be particularly complex. Some suggestions are given on how to improve the estimation of divisional betas.

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