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Valuation and Leverage and Estimating Value

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Valuation and Leverage
1. Discuss the concept of valuation with leverage. How could we estimate the appropriate cost of capita for a project. Explore how the financing decision of the firm can affect both the cost of capital and the set of cash flows that we discount.

Estimating value
2. Discuss the approach to estimate the value of investment.

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The expert examines valuation, leverage, and estimating values.

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Question 1
Valuation with leverage requires that the investment decision making takes into account the costs and benefits of the financing choices. Hence, this means that in estimating the appropriate cost of capital for a project, assuming that it is representative of the company's normal risk and financing structure, must take into account the ...

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