Day 2

  • Walk through a simple WACC calculation using a fictional cost of equity and debt.
  • Explain in your own words the APV formula and how it separates operations from financial benefits.
  • When would APV be preferred over WACC?
  • If tax rate increases, how does that affect WACC? Why?
  • Does WACC or APV show you how much of value comes from financing?

Day 2