Hi John,
I have another question need to ask. In the BPP Revision Kit Question Q35 Case Somax.
I can understand the answer fully until the last part when working out new WACC. Why the answer did not include the planed loan of $260M into the calculation to work out the WACC? Since the new loan will affect the capital structure and effectively affects the cost of capital.
Thank you very much!
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BPP Revision Q35 Somax
12y ago#1I am really sorry but I am away from home until Thursday and so I do not have access to the question.
I will answer when I get back (and please remind me on here if I forget!)
12y ago#2It is because the second paragraph of part (b) says that they are also proposing to raise equity finance and that there will as a result be little change in the gearing :-)
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