What is appropriate cost of capital to evaluate the business

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Reference no: EM13806686

Verano Inc. has two business divisions a software product line and a waste water clean-up product line. The software business has a cost of equity capital of 10% and the waste water clean-up business has a cost of equity capital of 7%. Verano has 50% of its revenue from software and the rest from the waste water business. Verano is considering a purchase of another company in the waste water business using equity financing. What is the appropriate cost of capital to evaluate the business?

A) 8.5%

B) 9%

C) 10%

D) 7%

Reference no: EM13806686

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