Straighten Technologies has 3 divisions. The dental products division has a beta of 1.2. The dental technology division has a beta of 2.0. The medical devices devision has a beta of 2.5. The risk free rate is 2% and the market risk premium is 7%. Suppose that the dental technology division is evaluating a new project. What should they use as the required rate of return for the project?

Multiple Choice:

• 15.3%

• 19.5%

• 8.9%

• 16.0%

• 10.4%