If a capital budgeting project is a business in a particular field it may make sense to use a beta common to that field in the security market line to estimate a risk-adjusted rate for analysis of the project.

Question

Quizplus · Accepted Answer

Using a beta common to the project's industry allows for a more accurate estimation of the project's risk-adjusted rate, as it takes into account the specific risks and market dynamics of that industry.

If a Capital Budgeting Project Is a Business in a Particular