Cargill Inc. is a privately held conglomerate firm consisting of five divisions. The firm is considering starting a fast-food restaurant business, tentatively named Cargill Kitchen. The table below summarizes the selected data for restaurant chain operators and other conglomerate firms listed in the major stock exchanges.

a) Determine the CAPM beta that is appropriate to use to calculate the unlevered cost of capital for Cargill Kitchen and provide a justification for your choice (approx. 100 words).

Diversified conglomerate firms: \begin{tabular}{llll} Virgin Group & 1.54 & .40 & 1.10 \\ Imperial Group & 1.30 & .00 & 1.30 \\ Tristar Corp & 1.92 & .50 & 1.20 \\ Conglomerate average & 1.59 & & 1.20 \\ Restaurant chain operators: & & & \\ Chipotle Mexican Grill & 2.57 & .60 & 1.35 \\ McDonalds & 1.55 & .10 & 1.45 \\ Yum Brands & 1.96 & .40 & 1.40 \\ Restaurant chain average & 2.02 & & 1.40 \\ \hline \end{tabular}