Can somebody explain why sometimes we use book value of debt and equity in the WACC formulae and sometimes (e.g. June 2009 Q2 b) ) we use market value of equity for calculating wacc before and after the change in gearing ?
Thx a lot !!
Thx a lot !!
ACCA Forums
AFMWACC - when to use market value of equity and when book value
14y ago#1Hi, by right we should always use the market value of the debt and equity.
Unless the question does not indicate the market value anywhere.
Unless the question does not indicate the market value anywhere.
DEPEND UPON GIVEN QUESTION
14y ago#3If the co is listed then we have to use market value as it makes sense and when co is not listed on stock exchange then we use book value
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