Original Articles

A Note on The Estimation of Betas for Single Industry Companies

Published in: De Ratione
Volume 7, issue 2, 1993 , pages: 24–34
DOI: 10.1080/10108270.1993.11435041
Author(s): Colin FirerUniversity of the Witwatersrand,, Trevor A ThompsonUniversity of the Witwatersrand,

Abstract

In order to use the Capital Asset Pricing Model to estimate the cost of equity capital for an unquoted firm, it is often necessary to use the “pure-play” technique to obtain a surrogate beta with an appropriate asset structure for the unquoted firm.

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