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.
2. Discuss the approach to estimate the value of investment.
Thank you for using BM.
Below are my answers.
Anna Liza Gaspar
NOTE: IN the OTA's own words in accordance with BM rules
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 ...
The expert examines valuation, leverage, and estimating values.