Divisional Costs of Capital

Newtown Propane currently has only a wholesale division and uses only equity capital; however, it is considering creating marketing and retail divisions. Its beta is currently 1.4. The marketing division is expected to have a beta of 2.1, because it will have more risk than the firms wholesale division. The retail division is expected to have a beta of 0.4, because it will have less risk than the firms wholesale division. The risk-free rate is 4.8%, and the market risk premium is 6.7%. Based on this information, fill in the missing cost of capital information below:

1. Wholesale division; (9.60% , 14.18%, 11.52%, 2.88%)

2. Marketing division (20.22%, 21.37%, 18.87%, 19.82%)

3. Retail division (7.48%, 20.92%, 20.82%, 19.62%)

4. If 70% of Newtown Propanes total value ends up in the wholesale division, 20% in the marketing division, and 10% in the retail division, then its investors should require a return of (15.75%, 14.45%, 17.30%, 19.20%).