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Milma Co

This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.

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November 23, 2020 at 12:43 pm #596144
akhila.vijay93
Participant
- Topics: 41
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Dear tutor,
Kindly explain why we have taken 11% to find the present value of Bahari Project.
Souldnt we include the cost of debt and discount the cashflow using the geared cost of equity or rather WACC?
November 23, 2020 at 3:10 pm #596162
John Moffat
Keymaster
- Topics: 57
- Replies: 54674
The question specifically says to use the cost of capital calculated in part (i) and is therefore effectively asking for an APV calculation.
November 24, 2020 at 1:19 am #596215
akhila.vijay93
Participant
- Topics: 41
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Thankyou Sir
November 24, 2020 at 11:32 am #596257
John Moffat
Keymaster
- Topics: 57
- Replies: 54674
You are welcome 🙂
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