The 'pure play' approach to estimating a division WACC involves
A) computing the value of the division if it were to be spun off as a separate company.
B) comparisons to free standing firms with businesses similar to the division.
C) 'deleveraging' the division so that only the cost of equity is considered.
D) using the company's WACC to estimate the value added by the division.
Correct Answer:
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