Creston Machine Works has two divisions: a machine tool division and robotic welding division. The machine tool division has a market value of $150 million; the welding division has a market value of $450 million. Creston Machine Works is a private company, but its welding division is very comparable to Path Robotics, which has a WACC of 8% per year. If the overall WACC for Creston Machine Works is 11% per year, what is the WACC for the machine tool division?

Creston Machine Works has two divisions: a machine tool division and robotic welding division. The machine tool division has a market value of $150 million; the welding division has a market value of $450 million. Creston Machine Works is a private company, but its welding division is very comparable to Path Robotics, which has a WACC of 8% per year. If the overall WACC for Creston Machine Works is 11% per year, what is the WACC for the machine tool division?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 4PB: Banyan Industries has two divisions, a tax rate of 30%, and a minimum rate of return of 20%....

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