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6. Ajax Inc. has 2 divisions and a cost of capital of 14%. The Safe Division has a cost of capital of 10% while the

6. Ajax Inc. has 2 divisions and a cost of capital of 14%. The Safe Division has a cost of capital of 10% while the Risky Division has a cost of capital of 18%. The Risky Division has a new project that is guaranteed with no risk. The risk-free rate is 4%. What rate (required return) should they use in evaluating the guaranteed project?

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