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Sir I didn’t understand the b part question discount on impairment.. can you pls help me with it
For future posts please identify the topic not the question name and give enough detail so that users don’t have to read the whole question.
Point of knowledge is that discount rate must reflect RISK IN ASSETS rather than the company’s actual borrowing cost WACC. RISK IN ASSET is connected with Betas which you learned about in FM.
So a retailer that sells shoes and gold watches may have to use 2 different discount rates for the 2 different CGUs.
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