Question
An all-equity, multi-divisions company has an overall beta of 1.3 and 9.5% overall cost of equity. The return for a secured government bond is 3%.
An all-equity, multi-divisions company has an overall beta of 1.3 and 9.5% overall cost of equity.
The return for a secured government bond is 3%.
The company's medical division has an expected beta of 0.85. What is the expected cost of capital for company's medical division?
A. 6.25%
B. 7.25%
C. 5.75%
D. 9.50%
E. 8.50%
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Global Corporate Finance A Focused Approach
Authors: Suk Hi Kim, Kenneth A Kim
2nd Edition
9814618004, 9789814618007
