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Benson's, Inc. has an overall cost of equity of 10.24 percent and a beta of 1.2. The firm is financed 100 percent with common stock.

Benson's, Inc. has an overall cost of equity of 10.24 percent and a beta of 1.2. The firm is financed 100 percent with common stock. The

riskfree

rate of return is 4 percent. What is an appropriate cost of capital for a division within the firm that has an estimated beta of 1.5?

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