Estimate the unlettered beta for HM plc

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Question - HM PLC has a capital structure of £60 million outstanding debt and £120 million equity. KM operates 3 divisions in the following business: broadcasting, hospitality and film production. The betas for these sectors are 0.8, 1.6 and 1.2 respectively. The company is considering to sell the film production sector. The market values of the broadcasting, hospitality and film production divisions are £100 million, £30 million and £ 50 million. The marginal corporate tax rate is 20%. Estimate the unlettered beta for HM plc.

Reference no: EM133176540

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