Divisional Costs of Capital A firm's cost of capital is often a reflection of its activities and funding needs, Consider the case of Wizard Company, and answer the following questions Wizard Co. currently has only a real estate division and uses only equity capital; however, It is considering creating consulting and distribution divisions. Its beta is currently 1.2.The risk-free rate is 2.8%, and the market-risk premium is 5.8%. o 2.50% 5.60% 9.76% o 6.16% This means that the firm's real estate division will have a cost of capital of: The consulting division is expected to have a beta of 1.9, because it will be riskier than the firm's real estate division. 14.77% 13.82% This means that the firm's consulting division wll have a cost of capital of 11 015.17% 16.32% The distribution division will have less risk than the firm's real estate division, so its beta is expected to be 0.4 14.57% 5.12% O 15.87% 15.77% This means that the distribution division's cost of capital will be: Wizard Co. expects 60% of its total value to end up in the real estate division, 25% in the consulting division, and 15% in the distribution division. 10.11% o 14.86% 11.41% O 12.96% Based on this information, what rate of return should its investors require once it opens the new divisions