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An Observation on Estimating the Systematic Risk of an Industry Segment
Roy L. Crum and Keqian Bi
Vol. 17, No. 1 (Spring, 1988), pp. 60-62
Stable URL: http://www.jstor.org/stable/3665916
Page Count: 3
You can always find the topics here!Topics: Mathematical problems, Economic value, Optimal solutions, Economic models, Capital costs, Programming models, Systematic risk, Capital asset pricing models, Return on capital, Financial management
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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.
Financial Management © 1988 Financial Management Association International