Dear Sir,
Estimation of the minimum rate of return on the additional debt financing required to maintain shareholder value
The last part of the answer for the changes in cash flow:
= $ 32.3 m /75% + [ (2,400 x 3.875%) - (800 x 5.6%) ]
= $ 91.3 m
In the answer, why is it using 5.6% instead of 4.65%?
Thanks sir.
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December 2008 - Q2(c)
11y ago#1He should have used 4.65% (if you have BPP's Revision Kit you will see that they have corrected it and used 4.65%)
I see. Thanks sir :)
11y ago#3You are welcome :-)
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