Calculating the cost of capital for divisions within a company is not recommended because the data is too fragmented and all divisions are part of the same company in any case.

Question

Quizplus · Accepted Answer

Calculating the cost of capital for divisions within a company is recommended as it helps in determining the appropriate discount rate to be used when evaluating projects or investments within that division. While the data may be fragmented, it can still provide valuable insights into the performance and risk of each division, which can drive more informed decision-making within the company as a whole.

Calculating the Cost of Capital for Divisions Within a Company