What is appropriate cost of capital to evaluate business

Reference no: EM13281634

Verano Inc. has 2 business divisions- a software product line and a waste water cleanup product line. The software business has a cost of equity capital of 12% and the waste water clean-up business has a cost of capital of 8%. Verano has 50% of its revenue from software and the rest from the waste water business. Verano is considering a purchase of another business using equity financing. What is the appropriate cost of capital to evaluate the business?

a. 8%
b. 12%
c. 11%
d. 10%

Reference no: EM13281634

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