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- This topic has 3 replies, 2 voices, and was last updated 8 years ago by
John Moffat.
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- June 5, 2016 at 4:37 pm #319650
q1) How do u calculate the Working Capital for each yr ?
q2) Why do u ungear using Thrllall data and then regear using Sleepon?
can u explain abt this thnks in advance
June 6, 2016 at 9:14 am #319767It increases by 3% a year.
They need 50 x 1.03 = 51.50 at time 1.
At time 2 they need an extra 3% x 51.50 = 1.5, so they now have 53.0
At time 3 they need an extra 3% x 53.0 = 1.6, so they now have 54.6
At time 4 they need an extra 3% x 54.6 = 1.6.
At time 5 it is all received as normal.The theme park has different business risk to Sleepon, but the same business risk as Thrillall. So Thrillalls business risk is measure by their asset beta which got by ungearing their equity beta using their gearing.
It is Sleepon doing the investing, so the equity beta applicable to the investment needs the asset beta regearing using Sleepons gearing.
June 6, 2016 at 11:45 am #319824oki got it
June 6, 2016 at 12:10 pm #319842Great 🙂
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