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Keg? (Capital Structure)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Keg? (Capital Structure)

  • This topic has 4 replies, 2 voices, and was last updated 13 years ago by AvatarJohn Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • December 5, 2012 at 1:05 pm #56182
    Avatarpolldoll
    Member
    • Topics: 10
    • Replies: 50
    • ☆☆

    Hello, hope you can help me.
    I’ve been reading the technical articles and have got to the June/Jul 09 article on Optimum Capital Structure. The article says:
    “Remember that Keg is a function of beta equity which includes both business and financial risk, so as financial risk increases, beta equity increases, Keg increases and WACC increases”
    I’m pretty sure I haven’t come across the term Keg before. What does it mean?
    These articles usually consolidate rather than causing panic LOL!

    December 5, 2012 at 1:31 pm #110339
    Avatarpolldoll
    Member
    • Topics: 10
    • Replies: 50
    • ☆☆

    P.s. I’m guessing from context it just means the geared cost of equity. Is that right?

    December 5, 2012 at 5:07 pm #110340
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    Don’t panic!

    It does just mean the geared cost of equity 🙂

    December 6, 2012 at 12:17 am #110341
    Avatarpolldoll
    Member
    • Topics: 10
    • Replies: 50
    • ☆☆

    Phew, thanks!

    December 6, 2012 at 8:41 am #110342
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
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