â€œCapital Services Consultingâ€ (CSC) is a large firm. Below is market value equity, asset beta, and market value debt for four departments at Capital Services Consulting.
Departmentâ€¦â€¦.Market Value Equityâ€¦â€¦ Asset Betaâ€¦â€¦â€¦.Market Value Debt
Accountingâ€¦â€¦â€¦â€¦â€¦$2.00â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.1.1 â€¦â€¦â€¦â€¦â€¦..$0.75
Finance â€¦â€¦â€¦â€¦â€¦â€¦.$2.00 â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦1.5â€¦â€¦â€¦â€¦.â€¦..$0.50
Payrollâ€¦â€¦â€¦â€¦â€¦â€¦....$1.00â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦..â€¦....2â€¦â€¦â€¦â€¦...â€¦..$1.00
Salesâ€¦â€¦â€¦â€¦â€¦â€¦â€¦..$3.00â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦...1â€¦â€¦â€¦â€¦â€¦â€¦..$1.25

Answer the following question about Capital Services Consulting (CSC). Show your calculations and formulas.
#1: Calculate CSC equity beta
#2: The T-Bond is 2.00% and market-risk premium is 5.00%. Calculate CSC stockowners return and show how much of that return is business risk (asset risk) and how much of the return is financial risk.
#3: What â€œWeighted Average Cost of Capitalâ€ (WACC) is used for each of CSC department? Should you use 1 WACC for the entire firm or 1 WACC for each department? Explain why.

â€œCapital Services Consultingâ€ (CSC) is a large firm. Below is m...

â€œCapital Services Consultingâ€ (CSC) is a large firm. Below is m...