Suppose your firm has decided to use a divisional WACC approach to analyze projects. The firm

currently has four divisions, A through D$,$ with average betas for each division of $0\mathrm{.}9,1\mathrm{.}3,1\mathrm{.}4,$ and $1\mathrm{.}5,$

respectively. Assume all current and future projects will be financed with $20$ percent debt and $80$

percent equity, the current cost of equity $($based on an average firm beta of $1\mathrm{.}3$ and a current risk$-$free

rate of $3$ percent$)$ is $11$ percent and the after$-$tax yield on the company's bonds is $8$ percent.