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Can any one clarify the below please!
From BPP revision kit Q 36 (I). calculation of WACC if share price if 470 and no conversion takes place: the question has stated the maket value of the $100 Million 8% loan stock as $110. However, in the calculation of the WACC the current price is calculated ($96.72) using the 9% GRY.
I am confused about using MV or current price? what is the difference?
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mv is actualy the market price which may be current price at a particular time.take for example the share price is $1/s for Z ltd today then the current price may be said to be $1/s
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usualy the current price will take a form of a discounted present value. hence the $96.72 is the present value of the securities.
@edward2012 said:
usualy the current price will take a form of a discounted present value. hence the $96.72 is the present value of the securities.THANKS, its quite clear now
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