Why is ungear cost of equity taken. The project is financed by 10% convertible debenture so normal cost of equity should be taken.
Am I Right?
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Daron Dec 95 (adapted to 2019) - KAPLAN
7y ago#1I do not have the Kaplan Kit (only the BPP Kit), and only have the past exams for the past 20 years.
I am guessing that the question is calculating the APV, in which case we do always use the ungeared cost of equity.
Thank you.
7y ago#3You are welcome :-)
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