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Ungeared beta for discounting

This topic has 1 reply, 2 voices, and was last updated 14 years ago by zigot14.

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June 4, 2010 at 9:28 am #44403
zuzana
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Hi there. Do you know why in Q5 Strayer (BPP kit), they are using the ungeared Ke for calculation of base case NPV?
Thanks! Zuzana
June 4, 2010 at 10:36 am #62038
zigot14
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Assumming that it’s an APV question, discounting using ungeared Ke for base case NPV is correct.
Because the financing effect is calculated separately.
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