Choose the correct answer I work as CFO in a publicly quoted Utility company We are going to create a new division that has different leverage (D E) and risk than the current company For the cost of equity using the CAPM approach for this new division, I will I will use as a proxy the beta of the market I will calculate a levered beta for this division taking into account the different leverage Use the 5 year regression beta of the stock In CAPM we use standard deviation for our cost of equity

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Question: Choose the correct answer: I work as CFO in a publicly quoted Utility company. We are going to create a new division that has different

Choose the correct answer: I work as CFO in a publicly quoted Utility company. We are going to create a new division that has different leverage (D/E) and risk than the current company. For the cost of equity using the CAPM approach for this new division, I will...

		I will use as a proxy the beta of the market
		I will calculate a levered beta for this division taking into account the different leverage
		Use the 5-year regression beta of the stock
		In CAPM we use standard deviation for our cost of equity

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