Verano Inc. has two business divisions- a software product line and a waste water clean-up product line.  The software business has a cost of equity capital of 10% and the waste water clean-up business has a cost of equity capital of 7%.  Verano has 50% of its revenue from software and the rest from the waste water business.  Verano is considering a purchase of another company in the waste water business using equity financing.  What is the appropriate cost of capital to evaluate the business?

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