corporate risk

1. Distinguish between beta (or market) risk, within-firm (or corporate) risk, and stand-alone risk for a project being considered for inclusion in the capital budget. Which type of risk do you believe should be given the greatest weight in capital budgeting decisions? Explain.
2. Suppose Reading Engine Company, which has a high beta as well as a great deal of corporate risk, merged with Simplicity Patterns Inc. Simplicity's sales rise during recessions, when people are more likely to make their own clothes, and, consequently, its beta is negative but its corporate risk is relatively high. What would the merger do to the required rates of return in the consolidated company's locomotive engine division and in its patterns division?