The correct answer is A. other company capital policy.
The pure play method is a method of estimating the cost of capital for a company that does not have a comparable peer group. It involves identifying companies that are similar to the company being valued in terms of their business, industry, and financial characteristics. The cost of capital for these companies is then averaged to arrive at a cost of capital for the company being valued.
The pure play method is based on the assumption that companies in the same industry have similar cost of capital structures. This assumption is not always accurate, but it can be a useful tool for estimating the cost of capital for a company that does not have a comparable peer group.
The other options are incorrect because they do not reflect the underlying principle of the pure play method. Option B, other company beta, is a measure of a company’s systematic risk. Option C, other company cost, is a measure of a company’s operating costs. Option D, other division cost, is a measure of a company’s costs for a particular division.