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1) You are a financial manager at Apple, which has two divisions. One division produces phones and has an asset beta of 2.5; the other division produces cars and has an asset beta of 1.5. Apple finances itself with 100% equity. The company’s weighted average cost of capital (WACC) is 18%.

You are evaluating a new project in the car division. You should use the company’s WACC of 18% to discount the project’s free cash flows. true or false? Why?

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Financial Management, Finance

Category:- Financial Management
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