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Suppose Conglomerate company has three divisions of equal size: An automotive retailer division with a beta of 2, a computer hard drive manufacturing division with

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Suppose Conglomerate company has three divisions of equal size: An automotive retailer division with a beta of 2, a computer hard drive manufacturing division with a bota of 1.3, and an electric utility division with a beta of 0.6. If the manager of the firm decides to use one discount rate (.o., to use the firm's overall cost of capital) to evaluate all its projects, what will happen to the firm's risk and share price in the long run? The firm's risk will decrease; stock price will increase; The firm's risk will increase; stock price will decrease; The firm's risk will increase; stock price will increase; There will be no change in firm's risk and stock price will increas as long as they choose positive NPV project even If using one discount rate: The firm's risk will decrease; stock price will decrease; o

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