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Hi sir
After the proposal, calculating Asset Beta, shouldn’t we use the new gearing structure? MVd $12.81m MVe $42.6m
Examiner has used the 50/50 pre proposal ratio?He is calculating the asset beta from the existing equity beta so for that part we need to use the existing gearing.
When you come to regear, to get the new equity beta, it is then that he correctly uses the new gearing.
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