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 1.1. The risk-free rate is 3.6%, and the market-risk premium is 6.1% 7.20% O 3.60% 7.56% 10.31% 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 2.1, because it will be riskier than the firm's real estate division O 16.41% O 17.76% 17.36% 18.91% This means that the firm's consulting division will have a cost of capital of: The distribution division will have less risk than the firm's real estate division, so its beta is expected to be 0.4 18.36% O 6.04% 18.46% O 17.16% This means that the distribution division's cost of capital will be Wizard Co. expects 70% of its total value to end up in the real estate division, 20% in the consulting division, and 10% in the distribution division 12.40% O 15.85% 13.95% O 11.10% Based on this information, what rate of return should its investors require once it opens the new divisions