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(Revised from original version)
Lex Service PLC-- Cost of Capital
Lex Service company has grown into a large multidivisional company with a substantial capital budget. In 1993, the board was reviewing its capital budgeting procedures. Specifically, it sought to determine the company's cost of capital and whether it should use different hurdle rates for different divisions.
Keywords: Budgets and Budgeting;
Cost of Capital;
Risk and Uncertainty;
Kester, W. Carl, and Kendall Backstrand. "Lex Service PLC-- Cost of Capital." Harvard Business School Case 296-003, March 1998. (Revised from original April 1996 version.)