Mid-States is a multi-divisional utility company. Mid-States has four divisions with the following betas and proportions of the firm's total assets: Division                                         Beta                % of Assets Electric & Gas                               0.75                      45 Bus transportation                       1.21                      20 Real estate                                   2.80                       25 Recreation                                    1.85                      10 The risk-free rate is 2 percent and the return on the stock market as a whole is 15%. If Mid-States is considering a residential development, what should the firm use as its cost of equity in evaluating this project

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