Page 47 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx
P. 47

Cost of capital





                           Using WACC





               WACC should only be used when performing an investment appraisal if:

                    the capital structure is constant,


                    new investment carries same business risk profile of entity,

                    new investment is marginal to the entity.





























































                                                                                                       39
   42   43   44   45   46   47   48   49   50   51   52