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Suppose your firm has decided to use a divisional WACC approach to analyze projects. The firm currently has four divisions, A through D , with
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 and respectively. Assume all current and future projects will be financed with
percent debt and percent equity, the current cost of equity based on an average firm beta of and a current riskfree rate of
percent is percent and the aftertax yield on the company's bonds is percent.
What will the WACCs be for each division? Do not round intermediate calculations. Round your final answers to decimal places.
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