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An example of use beta of Kinepolis in this valuation

A financial consultant is valuing the company I set as an objective (an entertainment centre) by discounting the cash flows until the end of the dealership at 7.26% (interest rate on 30-year-bonds = 5.1%; market premium = 5%, and Beta = 0.47%). 0.47 is a beta provided by Bloomberg for Kinepolis (the company whose activity is the management of several cinemas in the EU), in function of the Dax Index. Is it correct to use the beta of Kinepolis in this valuation?

E

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No, it is obviously not correct to use the beta of Kinepolis in this valuation. The required return to shares (7.26 percent) is a ridiculous number for an entertainment center. In the use of calculated betas.

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