sir in this question as far as calculating the combined co' MV of equity is concerned, we are given "pre-tax profit margin" which means at finances costs have been deducted. But then we sill use the cost of capital, to find the FCFs to perpetuity. we should have used the cost of equity right? Ke wasn't provided here tho! but its technically wrong, because we assume that WACC takes account of Finance costs so we shouldn't deduct it separately
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opao co(dec 18) -III
5y ago#1The pre-tax profit margin is stated as being a % of sales. Therefore it must be before finance costs.
Sir but in westparley March 2020 we assumed that finance costs were deducted! In part b)i when trying to calculate the matravers tech value
5y ago#3The wording in Westparley was completely different!
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