The corporation is a multidivisional conglomerate the food


The corporation is a multidivisional conglomerate. The food division is undergoing a capital budget analysis and must estimate the divisions beta. This division has a different level of systematic risk than is typical for Corporation as a whole. The most appropriate method for estimating this beta is:

a. the regression coefficient from a time series regression of food divisions return on assets on a market index

b. the regression coefficient from a time series regression of corporation stock returns on a market index

c. To multiply the companys beta by the ratio of the food divisions total assets/corporation total assets

d. the regression coefficient from a time series regression of food divisions net income on the corporations return of assets

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Other Subject: The corporation is a multidivisional conglomerate the food
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