Page 139 - AFM Integrated Workbook STUDENT S18-J19
P. 139
Risk adjusted WACC and adjusted present value
Risk adjusted WACC
V e V d
WACC = k + k (1 – T)
d
e
V + V d V + V d
e
e
= [(50/100) × 14.3%] + [(50/100) × 4% × (1–0.20)] = 8.75%
Illustrations and further practice
Now try TYU 1 in Chapter 7
127
