79 intergrand

1. Because of what is written in note 9 of the question. 2. Because the question specifically asks for an all-equity rate to be used (i.e. APV). The current equity beta includes the effect of the gearing, which obviously needs removing if we are using an APV approach. I get the impression that you are trying to learn for P4 simply by attempting past questions - which is fine - and using this forum as a way of getting free private tuition. We do not give free private tuition and I am therefore only prepared to answer questions on the basis that you have already watched all of our free lectures and have therefore studied before attempting questions!