Old Town Industries has three divisions. Division X has been in existence the longest and has the most stable sales and the lowest risk. Division Y has been in existence for five years and is slightly less risky than the overall firm. Division Z is the research and development (R&D) side of the business. Given this, the firm probably should..

a. use the firm's WACC as the cost of capital for Division Z as it provides analysis for the entire firm b. not use a single composite WACC for all projects in the three divisions.

c. use Division X's or Y's cost of capital for Division

d. assign the lowest divisional cost of capital to Division because it is most likely the riskiest of the three divisions

Old Town Industries has three divisions. Division X has been in existence the longest and has the most stable sales and the lowest risk. Division Y has been in existence for five years and is slightly less risky than the overall firm. Division Z is the research and development (R&D) side of the business. Given this, the firm probably should O a. use the firm's WACC as the cost of capital for Division Z as it provides analysis for the entire firm. ob. not use a single composite WACC for all projects in the three divisions. Oc. use Division X's or Y's cost of capital for Division Z. od. assign the lowest divisional cost of capital to Division Z because it is most likely the riskiest of the three divisions