For a Firm with Multiple Business Units,the Cost of Capital

question 56

Multiple Choice

For a firm with multiple business units,the cost of capital developed for each unit is called a:

• A) divisional cost of capital.
• B) pure play approach.
• C) subjective risk adjustment.
• D) stratified beta coefficient.
• E) fundamental beta coefficient.

---

Definitions:

BATNA

Stands for Best Alternative To a Negotiated Agreement, the course of action that will be taken by a party engaged in negotiation if the current negotiations fail and an agreement cannot be reached.

Negotiating Party

A negotiating party refers to an individual or group involved in discussions aimed at reaching an agreement or compromise on specific matters.

Written Agreement

A formal document in which the parties involved agree to certain terms and conditions that are put in writing.

Personal Rapport

The process of building a close and harmonious relationship in which the people or groups involved understand each other’s feelings or ideas and communicate well.