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OpenStudy (anonymous):

Hi? I'm Ekaterina, a bussiness valuer from Russia. The question is Why do we need to correct Beta for cash?

OpenStudy (yomama):

Suppose that your company has $100 of S&P 500 and $100 of cash. Beta = 1/2 Suppose your company only has $100 of S&P 500. Beta=1

OpenStudy (anonymous):

To get the beta for operating assets which may be very different from the beta of the entire firm (which may hold a lot of cash)

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