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You have the following information about the three division that make up your company: Division X Division Y Division Z Beta 1 . 0 5
You have the following information about the three division that make up your company:
Division X Division Y Division Z
Beta
Additionally, you observe that the riskfree rate on year government securities is and you estimate that the market equity risk premium is Please calculate the following as a percentage with two decimal points for example
a Please calculate the divisional cost of capital Division X
b Please calculate the divisional cost of capital Division Y
c Please calculate the divisional cost of capital Division Z
d Which of these divisions is the riskiest in terms of market risk Division Y would be the riskiest division in terms of market risk.
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