=+7. Cubic pIe is a multidivisional company which has principal activities organized into consumer durable, industrial plant hire and leisure divisions. These 3 divisions comprise 60%, 20% and 20% of the total firms value respectively.

Cubic is attempting to identify separate costs of capital for each division and has discovered the following three competitors:

Company Icelandic pie B & H Plant Hire pie Ladswell Leisure pie Estimated equity beta 0.9 1.3 1.9 Proportion of debt in capital structure 0.2 0.4 0.3