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: 4.40% 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 4.4%, and the market-risk premium is 6.1%. O 9.24% 11.11% 8.80% 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 2.2, because it will be riskier than the firm's real estate division. 0 18.77% 17.82% O 19.17% 20.32% 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. 19.77% 19.87% O 6.84% This means that the distribution division's cost of capital will be: O 18.57% 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. 16.90% 12.15% 0 13.45% O 15.00% Based on this information, what rate of return should its investors require once it opens the new divisions