Buy It Cheap Has an Overall Beta of

question 66

Multiple Choice

Buy It Cheap has an overall beta of .88 and a cost of equity of 11.2 percent for the firm overall. The firm is 100 percent financed with common stock. Division A within the firm has an estimated beta of
1) 34 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 5 percent?

• A) 13.5 percent
• B) 14.7 percent
• C) 15.3 percent
• D) 15.9 percent
• E) 17.1 percent

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Definitions:

Language Problem

Issues or barriers in communication arising from differences in language or linguistic proficiency.

Communication Skills

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Technical Skills

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