Baxter Ltd. is a privately-held company operating in the building materials industry and is trying to calculate a cost of capital to use in the capital budgeting process. Future projects will continue to be in the same industry, so it was felt an accurate WACC could be calculated using company data. Since Baxter is privately held, no price information was available for the calculation of its beta. To estimate beta, it decided to use several pure plays for comparison, and was able to collect the following information: Company Beta Debt-to-Equity (%) Wilson 1.21 40.0 Jacob and Sons 1.34 50.0 Mathew Jenkins 1.53 65.0 Average 1.36 52.0 The value of Wilson as a pure play is questionable since it has two separate divisions