1. Your company has a division on the Isle of Wight. The accounting beta of the division is 0.90. Your companys accounting beta is 2. Your companys equity beta is 1.4. The firm has a value of 800M, debt of 200M, and cash and marketable securities of 50M. The risk-free rate is 2.5% and the GRP is 6%. What is the proper cost of capital for the division?

2. Your company generates 23% of its revenue in Chile. The average for companies in Chile is generating 70% of revenues in Chile. CDS yield for Chile is 3%. The divisions operating beta is 1.2. The US Treasury rate is 3%. The GRP is 5%. What is the WACC?