Assume that Amazon is also considering investing in the Dry Cleaning business (why not, they have invested in everything else!). In terms of capital structure, Amazon and P&G have a similar level of debt -- let's assume that their capital structure (% of debt vs. % of market value of equity) is identical. The Beta for P&G's stock is 0.34. The Beta for Amazon's stock Is 1.62. Based on this information please answer the following:

1) Which company, P&G or Amazon, would you assume (based on the above) to have a lower WACC? Why?

2) Based on your answer to question 1, based on the NPV tool, to which company would investment in the Dry Cleaning business look more attractive.

3) Does it make sense for both P&G and Amazon to use their company wide WACC to evaluate an investment in the Dry Cleaning business? Why or why not?

Assume that Amazon is also considering investing in the Dry Cleaning business (why not, they have invested in everything else!). In terms of capital structure, Amazon and P&G have a similar level of debt -- let's assume that their capital structure (% of debt vs. % of market value of equity) is identical. The Beta for P&G's stock is 0.34. The Beta for Amazon's stock Is 1.62. Based on this information please answer the following: 1) Which company, P&G or Amazon, would you assume (based on the above) to have a lower WACC? Why? 2) Based on your answer to question 1, based on the NPV tool, to which company would investment in the Dry Cleaning business look more attractive. 3) Does it make sense for both P&G and Amazon to use their company wide WACC to evaluate an investment in the Dry Cleaning business? Why or why not?