When (and when not!) to use the WACC for Investment appraisal

19 Comments
View all ACCA Paper F9 lectures >> This ACCA F9 lecture is based on OpenTuition course notes, view or download lecture notes here>>

Comments

  1. Avatar of ayeshaoruna ayeshaoruna says:
    March 18, 2013 at 4:13 pm

    Where is the example question? It’s not on the course note of chapter 18. Please advise

  2. Avatar of uyentran uyentran says:
    June 14, 2012 at 10:39 am

    Thanks so much Teacher. It is so helpful for me.

  3. Avatar of jaykhawaja jaykhawaja says:
    June 9, 2012 at 12:51 pm

    r we not suppose to use tax on preference shares as we pay intrest …and the formula must be i(1-t)/P

  4. Avatar of ponpinn ponpinn says:
    May 8, 2012 at 3:07 pm

    i love this teacher. you’re the best

  5. Avatar of joycelyn37 joycelyn37 says:
    March 4, 2012 at 2:55 pm

    you are thebest

  6. Avatar of funlover funlover says:
    November 29, 2011 at 8:47 pm

    By the way, when to use WACC has been fully described, but when not to has not been discussed.Please show us where it is.

    • Avatar of johnmoffat johnmoffat says:
      March 4, 2012 at 4:15 pm

      @funlover, when not to use it is when the conditions described do not apply!!!!
      (i.e. if the gearing changes (because of the way the project is financed) or when the business risk changes (because the project is more or less risky))

      The effect of gearing changes is not examined with numbers at F9 (only discussion of Modigliani and Miller). The effect of the project being more or less risky than the company is covered by Capital Asset Pricing Model.

  7. Avatar of funlover funlover says:
    November 29, 2011 at 7:15 pm

    Wonderful explanation- what I really like about your lectures is the logic you are building bit by bit.We cannot find many lecturers like that and we’ll end up cramming whole stuff without knowing what’s going inside.

    I believe the lecturer wants us to think about the knock on effect.

  8. Avatar of nafsika nafsika says:
    November 20, 2011 at 1:02 pm

    No worries I read the answer above…ACCA Website thank you.

  9. Avatar of nafsika nafsika says:
    November 20, 2011 at 12:15 pm

    It is a bit confusing, I cannot find the example that the lector is using… It is not chapter 18… where can I found it please?

  10. Avatar of admin admin says:
    November 11, 2011 at 1:19 pm

    This ACCA F9 lecture is based on OpenTuition course notes,

  11. Avatar of thanaluxmy thanaluxmy says:
    November 11, 2011 at 12:37 pm

    Which year paper is this?

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