A type of beta which incorporates about company such as changes in capital structure is classified as___________?
Correct answer: D. Fundamental Beta
- A. Industry Beta
- B. Market Beta
- C. Subtracted Beta
- D. Fundamental Beta
Explanation
Fundamental beta reflects company-specific fundamentals, including changes in capital structure, operating risk and financial risk. Industry beta is generally estimated from comparable firms and is often adjusted for leverage.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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