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Milma Co

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Milma Co

Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 23, 2020 at 12:43 pm #596144
    Avatarakhila.vijay93
    Participant
    • Topics: 41
    • Replies: 43
    • ☆☆

    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
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    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
    Avatarakhila.vijay93
    Participant
    • Topics: 41
    • Replies: 43
    • ☆☆

    Thankyou Sir

    November 24, 2020 at 11:32 am #596257
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    You are welcome 🙂

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Viewing 4 posts - 1 through 4 (of 4 total)
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