Different costs of capital for different operating divisions

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Reference no: EM132025488

1. What is the duration of a two-year bond that pays an annual coupon of 5%, returns the face value, and has a current yield to maturity of 4.5%. Use $1000 as the face value.

2. Under what circumstances would it be appropriate for a firm to use different costs of capital for its different operating divisions?

Reference no: EM132025488

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