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Corporal Electric has two divisions. The first division manufactures consumer goods. The of firms that only produce consumer goods is 1.0. The second division produces
Corporal Electric has two divisions. The first division manufactures consumer goods. The of firms that only produce consumer goods is 1.0. The second division produces gas turbines. The two divisions each constitute 50% of the firm. The firm has no debt. If the overall company WACC is 15%, what is the an estimate of the WACC for the gas turbine division? Assume 5% risk-less interest rate and market risk premium being 8%.
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