[教材、Notes、资料] [求助]L2 Corporate Finance Notes P317(#16) (Residual Dividend Policy)

should, Thank

Why don't we use Cost of Equity (14.5%) to calculate WACC in this case? When should we use Cost of Retained Earnings to calculate WACC? Thank you!!

不羞蝙蝠

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发表于 2011-5-13 10:27 | 只看该作者

We have two options to raise funds for new projects, retained earning and new issueed equity. Since the the cost of retained earning is lower, it have higher priority.

To be noticed here, the WACC here refers the required return for new investment.

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一叶孤舟

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发表于 2011-5-15 04:43 | 只看该作者

对的，是针对整个projects来说的，而这个Projects是要靠new equity和debt共同来融资的，所以用的是WACC

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[教材、Notes、资料] [求助]L2 Corporate Finance Notes P317(#16) (Residual Dividend Policy)

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