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Ask the Tutor ACCA AFM

APV method

Former userFormer user5y ago

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John MoffatJohn MoffatTutor5y ago#1
One thing leads to another. If the gearing changes significantly then automatically the financial risk attaching to the equity changes significantly.
John MoffatJohn MoffatTutor5y ago#2
Yes, If there is a significant change in the gearing (whether it be as a result of more equity or more debt) then we should use an APV approach.
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