The risk-adjusted cost of capital for particular division

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1. What factors influence a company’s WACC?

2. Should the company use the overall, or composite, WACC as the hurdle rate for each of its division’s?

3. What procedures are used to determine the risk-adjusted cost of capital for a particular division? What approaches are used to measure a division’s beta?

4. What are three types of project risk? How is each type of risk used?

5. Explain in words why new common stock that is raised externally has a higher percentage cost than equity that is raised internally as retained earnings.

Reference no: EM132014523

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