1. what is the best division to invest?
2. Why are the "Cost of Equity" requested by investors by division different? In what case would they be the same?
3. why banks ask for different credit rate?

when
BL = Beta levered --> that is used for the calculation of the cost of equity
BU = Beta unlevered

 

Marriott Corporation Lodging Contract services Restaurants % Debt D 60% 74% 40% 42% % Equity E 40% 26% 60% 58% debt-to- equity ratio D/E 1.50 2.85 0.67 0.72 Cost of Debt Riskfree Estimated identifiable Rate Credit Rate Tax Rate % Sales % Utility assets 1.30% 44.10% 1.10% 44.10% 1.40% 44.10% 1.80% 44.10% 100% 100% 41% 51% 46% 33% 13% 16% Cost of 10.02% Equity 19.64% 8.72% 9.82% 19.22% 8.72% 10.12% 14.44% 8.72% 18.38% 10.52% 8.72% 100% 13% 59% 27% BL Bu 1.11 1.41 0.77 1.30 0.60 0.55 0.56 0.93 WACC 10.15% 9.10% 10.90% 13.10%