Divisional Costs of Capital Newtown Propane currently has only a wholesale division and uses only equity capital;
Question:
Divisional Costs of Capital
Newtown Propane currently has only a wholesale division and uses only equity capital; however, it is considering creating marketing and retail divisions. Its beta is currently 1.5. The marketing division is expected to have a beta of 1.9, because it will have more risk than the firm's wholesale division. The retail division is expected to have a beta of 0.6, because it will have less risk than the firm's wholesale division. The risk-free rate is 4.4%, and the market risk premium is 6.4%. Based on this information, fill in the missing cost of capital information below:
Wholesale division
Marketing division
Retail division
If 55% of Newtown Propane's total value ends up in the wholesale division, 20% in the marketing division, and 25% in the retail division, then its investors should require a return of.