Question: Question 12 In the Marriott case, suppose we had information on comparable companies for the contract services division. Company Equity Beta Debt-to-Value A 1.1

Question 12 In the Marriott case, suppose we had information on comparable companies for the contract services division. Company Equity Beta Debt-to-Value A 1.1 B 1.35 50% 62% C 0.84 70% 5 pts The market risk premium is 7.43% and the risk free rate is 8.725%. If the contract services division has a target debt-to-value ratio of 40%, can you estimate the cost of equity for this division? (Assume debt beta is zero). O 37.58% 12.36% O 17.21% 14.15% 26.04% Previous

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