Session 9: Bottom Up Betas

This session is a grind with numbers building on top of numbers. In specific, we looked at how to estimate the beta for not only a company but its individual businesses by building up to a beta, rather than trusting a single regression. With Disney, we estimated a beta for each of the five businesses it was in, a collective beta for Disney's operating businesses and a beta for Disney as a company (including its cash). If you got lost at some stage in the class, here are some of the ways you can get unlost: 1. Review the slides that we covered today. 2. Try the post-class test and solution. I think it will really help bring together some of the mechanical issues involved in estimating betas. 3. Read this short Q&A on bottom up betas which highlights the estimation process and some of its pitfalls: http://www.stern.nyu.edu/~adamodar/New_Home_Page/TenQs/TenQsBottomupBetas.htm Slides: http://www.stern.nyu.edu/~adamodar/podcasts/cfspr17/session9.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session9test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session9soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices