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Hello John please correct me if I’m wrong
A) whenever we find the apv the base npv must be found by discount the fcf with cost of equity
B) if they ask in exam to find the beta, didn’t specify if it is asset or equity we must assume that as equity betaLooking forward for your reply
And if possible please give some tips on AFM ?
Thank you ?1. We discount at whatever the cost of equity would be if it were entirely equity financed.
2. It will be clear from the question which beta is required. If it were for a project then it would be the asset beta, if it were for calculating the WACC then it would be the equity beta.
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