Chapter 9, Problem 11MC

Summary Introduction

Case summary:

While looking into a few previous years. J manufacturers have been too compelled by the large cost of capital to get different capital investments. Currently, even though there is a decrease in the cost of capital and the company gives high priority for a development plan suggested by the marketing division.

To determine: The procedures can use to determine the cost of capital after removing risk factor and the approaches used to measures a division’s beta.