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Suppose Altria Corp ( which has two major divisions -cigarettes and food) sold off one of...

Suppose Altria Corp ( which has two major divisions -cigarettes and food) sold off one of the cigarette division. Explain why change ( if any ) this would have on its systematic risk.

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Systematic risk, also known as "market risk" or "un-diversifiable risk", is the uncertainty inherent to the entire market or entire market segment. Also, referred to as volatility, systematic risk consists of the day-to-day fluctuations in a stock's price. Beta coefficient is measure of systematic risk.

Company engage in cigarettes and food business out of which company sold off one of the cigarette division. So now company is only in food. in food busienss company can face systematic risk that is market risk. Any change in taste and preference of can lead to directly affect the sale of business. again if FDA imple some rule might direct affect the food business. other natural factor like flood less product might affect the business directly.

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