What is an appropriate cost of capital for given division

Reference no: EM132000455

Question: Miller Sisters has an overall beta of 1.27 and a cost of equity of 13.4 percent for the firm overall. The firm is all-equity financed. Division A within the firm has an estimated beta of 1.46 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 7.7 percent?

Reference no: EM132000455

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