Can I say that when there is no gearing (all equity financing), Beta assets = Beta company = Beta equity? While WACC = cost of equity only?
When gearing is added, the above Beta assets or Beta company can then be re-calculated to a new Beta equity, this new Beta equity can be used to find out a new Cost of Equity through the CAPM formula?
If the gearing or capital structure has undergone a big change, Adjusted Present Value is much better than a new Beta or a new WACC?
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About gearing, Beta, WACC and cost of equity
3y ago#1All you have written is correct :-)
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