Consider the case of the Pepsi Company (Everything must be developed in Excel)
1) With the information given in the case, calculate the cost of capital for each of the divisions (segments) and the total for the company. It adds up to 11%? Explain.
Note: You must argue the criteria for selecting the variables for the calculations.
2) Using McCartt’s decision on unadjusted betas, calculate the cost of capital for each of the divisions.
Comment the result in function of what was obtained in 1) and in relation to the decision, on this point, taken by McCartt.
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