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Chikepe question 1 appendix 1 when calculating equity value of Foshoro, why can’t use the FCFE method?
Is it correct if I adjust from PAT?
If not, why not? I am confused when to use the FCFE method.
Thanks for your time
Yes – you would still get the marks if you had calculated the free cash flow to equity (although you would then have had to spend time calculating the relevant cost of equity as opposed to the relevant WACC).
Hi John, if using FCFE method is possible, how to calculate cost of equity? question does not provide cost of debt for Foshoro.
Thanks for your time.
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