Question
HD Oil has an overall cost of equity of 13.6 percent and a beta of 1.20. The firm is financed solely with common stock. The
HD Oil has an overall cost of equity of 13.6 percent and a beta of 1.20. The firm is financed solely with common stock. The risk-free rate of return is 3.4 percent. What is an appropriate cost of capital for a division within the firm that has an estimated beta of 1.18?
| 13.43 percent | ||
| 14.41 percent | ||
| 12.54 percent | ||
| 11.67 percent | ||
| 12.80 percent |
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The Foundations Of Business Analysis
Authors: M Douglas Berg
1st Edition
1465222030, 9781465222039
