The CFO of a conglomerate is considering launching a new project and needs to estimate...
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Finance
The CFO of a conglomerate is considering launching a new project and needs to estimate the cost of capital. Which of the following statements about the pure play approach is(are) correct? I) The pure play firms must be all equity financed; II) Collect information about the equity betas and capital structure ratios of the pure play firms; III) The equity beta of the project is estimated by taking the average of equity betas of the pure play firms.
I only
II only
III only
I and II
I and III
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