Question

Smartkids, a textbook publisher, is considering investing in a software company that collects and stores data. What beta should smartkids use to assess the risk of the project?

Answer 1

The fact that Smartkids is considering an investment in a software company means that the beta that Smartkids should use to assess the risk of the project is D) The beta for software companies that collect and store data.

What beta would be best for Smartkids?

When choosing a project beta, a company should take into account the betas of companies in the industry because these companies will be facing the same challenges that the project would face.

Smartkids should therefore take the beta of software companies that collect and store data just like the software company that they hope to acquire.

Options for this question are:

• the beta for the textbook industry as a whole
• the beta for Smartkids
• the beta for software companies as a whole
• the beta for software companies that collect and store data

Find out more on project beta at https://brainly.com/question/17151024

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