A firm's cost of capital is often a reflection of its activities and funding needs. Consider the case of Wizard Company and answer the following questions: Wizard Co. currently has only a real estate division and uses only equity capital; however, it is considering creating consulting and distribution divisions. Its beta is currently 1.5. The risk-free rate is 4.2%, and the market-risk premium is 6.1% 8.40% 0 4.20% 13.35% O 10.50% This means that the firm's real estate division will have a cost of capital of: The consulting division is expected to have a beta of 1.9, because it will be riskier than the firm's real estate division O 18.29% O 15.7996 17.14% O 16.74% This means that the firm's consulting division will have a cost of capital of: The distribution division will have less risk than the firm's real estate division, so its beta is expected to be 0.5 16.54% Q 17.74% 7.25% 17.84% This means that the distribution division's cost of capital will be: Wizard Co. expects 75% of its total value to end up in the real estate division, 10% in the consulting division, and 15% in the distribution division. 17.43% 15.53% 13.98% 12.68% Based on this information, what rate of return should its investors require once it opens the new divisions