Use the following information to answer the question(s) below. The risk-free rate of interest...
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Accounting
Use the following information to answer the question(s) below. 
The risk-free rate of interest is 3% and the market risk premium is 5%. The cost of capital for the oil exploration division is closest to:
Group of answer choices
6.0%
7.0%
8.5%
10.0%
Asset Beta 1.4 1.1 0.8 Division Oil Exploration Oil Refining Gas & Convenience Stores Next Period's Expected Free Cash Flow ($mm) 450 525 600 Expected Growth Rate 4.0% 2.5% 3.0%
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