You are working as a consultant for Green Team, Inc. (GT), an energy and construction company based in San Diego. GT was founded 10 years ago by Bill Rettman and Isabel Flores. Rettman and Flores met 21 years ago when both worked as engineering managers for San Diego Gas & Electric. GT provides energy efficient heating, ventilation and air conditioning (HVAC) solutions and other energy saving technology to a variety of corporate customers. Recently, GT has been exploring opportunities to expand its offerings to include large-scale systems for convention centers, government facilities and transit hubs. The company wants to bring in new investors to help fund their expansion. Bill and Isabel are wondering how to price additional shares. A key component of their analysis is an estimate of the required return for GT shareholders. Bill and Isabel want to use a publicly traded company as a benchmark and they have selected Trane Technologies plc (ticker TT) as one that closely reflects GTs business. 1 Your consulting assignment is to investigate the weighted average cost of capital for TT as well as examining certain other public companies as described below, and report back to Rettman and Flores.

After completing your analysis, you report back to GT management. What is your recommendation for a benchmark to use for GTs required return? What factors might need to be considered in adjusting public company information to make it applicable to GT? (There is no right or wrong answer to item 8. Make a case for your position using the information you have gathered from earlier questions.)