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Use the following information to answer the questions below

Use the following information to answer the question(s) below.

Asset Beta 1.4 1.1 0.8 Division Oil Exploration Oil Refining Gas & Convenience Stores Next Periods Expected Free Cash Flow (

The risk-free rate of interest is 3% and the market risk premium is 5%.


The cost of capital for the oil exploration division is closest to:

Group of answer choices

6.0%

7.0%

8.5%

10.0%

Asset Beta 1.4 1.1 0.8 Division Oil Exploration Oil Refining Gas & Convenience Stores Next Period's Expected Free Cash Flow ($mm) 450 525 600 Expected Growth Rate 4.0% 2.5% 3.0%

Jan 31 2020 View more View Less

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