• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

APV, the ungeared cost of equity and asset beta

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › APV, the ungeared cost of equity and asset beta

  • This topic has 0 replies, 1 voice, and was last updated 14 years ago by mmia.
Viewing 1 post (of 1 total)
  • Author
    Posts
  • November 25, 2010 at 11:38 pm #46256
    mmia
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    I am not sure about some assumptions I made on APV and cost of equity. I would be very greatful if you found the time to answer my questions.

    If I use an APV approach to evaluate a project, I would value the project cash flows as if they were all equity financed, right?

    Had I to use the Modigliani Miller Formular, I would use the ungeared cost of capital (kei) to discount the Present value of the project values, right?

    Furthermore, if it came to ungearing beta values in an APV approach in the exam: Is it appropriate to calculate and use the asset beta (the ungeared beta) to establish the discount rate? So would I use the asset beta in my CAPM formular to come to the right cost of equity?

    Furthermore, independently from what valuation method I use (APV; NPV…) if I decide to finance a project entirely from equity, would I use an ungeared beta when calculating the cost of equity with the CAPM formular?

    Thank you.

  • Author
    Posts
Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • hhys on PM Chapter 14 Questions More variance analysis
  • azubair on Time Series Analysis – ACCA Management Accounting (MA)
  • bizuayehuy on Interest rate risk management (1) Part 1 – ACCA (AFM) lectures
  • sokleng on FM Chapter 7 Questions – Investment appraisal – methods
  • Annabelayinloya on IFRS 16 Identifying a lease – ACCA (SBR) lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in