A new approach for estimating divisional betas is developed in this study. The approach is based on a sound theoretical foundation; utilizes all available information, yet still has parsimonious data requirements; can be implemented with simple statistical tools; and provides unambiguously...

An analysis of the dual problem described by Ronn (1987) reveals that it provides a powerful and easily interpretable test for the hypothesis of a single class of marginal investors, including models of equilibrium based on a “representative tax bracket.” When Ronn's empirical tests are...