Qzx Investment Ltd panning to invest in two dictions. The following data are available for both divisions: Equity beta Tax rate Debt Capital (Market Value) Equity (Market Value) Cost of debt Risk-free rate of interest Market risk premium Division - 1 1.0 30 98,000,000 178,000,000 7% 4 8 Division - 2 1.5 30 84,000,000 155,000,000 8% 5 9 The company uses 10 per cent expected rate of return to evaluate investments; however, due to latest developments the company management realized that two divisions have quite different risk and returns. The Company CFO requested from finance managers to aims to estimate the cost of capital as precisely as possible and tries to evaluate how acceptable investments in both divisions are at a 10 per cent rate. REQUIRED: a. Estimate the weighted average cost of capital (WACC) for two divisions. b. How acceptable is the investment at a 10 per cent rate of return? C. Assume Ozy Investment Ltd expect 12 per cent return on investment. Do you think that this rate is appropriate? Explain