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Can somebody explain why sometimes we use book value of debt and equity in the WACC formulae and sometimes (e.g. June 2009 Q2 b) ) we use market value of equity for calculating wacc before and after the change in gearing ?
Thx a lot !!- Topics: 0
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Hi, by right we should always use the market value of the debt and equity.
Unless the question does not indicate the market value anywhere.- Topics: 0
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If the co is listed then we have to use market value as it makes sense and when co is not listed on stock exchange then we use book value
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