darren

Flow to Equity- discount the cashflow from the project to equity holder of the leveraged firm at the cost of leveraged equity.

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12 years ago

حامد الزرعوني

@Hamdaww ni finish I understood because the first firm is unlevered and there is no B/S ratio nor debt so the cost of equity will be R0

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12 years ago

حمدة الحواي

@D_HamiDy I think cost of debt + equity

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12 years ago

FH♕

@D_HamiDy oh yea, when the firm is unlevered (no debt) cost of equity is the same as wacc (cost of capital)

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12 years ago

حامد الزرعوني

@FatmaHashim_ in the handout the have written that cost of equity is 10% but part b says find Rs :s and we used the 10% as R0

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12 years ago

FH♕

@D_HamiDy what I know is cost of equity is Rs & cost of capital is R0 which could be wacc

http://twitter.com/FatmaHashim_

12 years ago

حامد الزرعوني

Fin450 bro and sis in the handout the cost of equity is supposed to be cost of capital 9a7 @FatmaHashim_ @Hamdaww @M_AlMail @Abdulaziz__R

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12 years ago