What is an appropriate cost of capital for division

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ACME Corp has an overall beta of 1.4 and a cost of equity of 18.24 percent for the firm overall. The firm is all-equity financed. Division A within the firm has an estimated beta of 1.65 and is the riskiest of all of the firm's operations. What is an appropriate cost of capital for division A if the market risk premium is 8.7 percent?

Reference no: EM131932294

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