CNT Ltd is a telecommunication company. In 2018, the company plans to expand its business into transport industry by adding a transport division. The new division will be financed in the same way as CNT. Which of the following methods is the most appropriate to value this project?

Select one:

a.Discount the division FCF at CNTs levered cost of equity

b.Discount the division FCF at CNTs existing after-tax WACC

c.Discount the division FCF at a benchmark WACC, which reflects the business risk of the division only.

d.Discount the division FCF at a benchmark WACC, which reflects both the business risk and the financial risk of the division.

e.Discount the division FCF at CNTs unlevered cost of equity