Certainly, to get the beta of the project we ungear the equity beta of a similar company using the gearing of that similar company. When we come to using that beta, it really depends how the project is being financed. We should regear the beta depending on how we are financing the project. If the project were to be financed entirely from equity, then the beta does not need regearing.

Download video lagu asmaul husna versi anak-anak. As the level of gearing increases, the larger proportion of debt in the capital. Step 1 Convert the geared beta value for the industry to an ungeared beta (asset.

However, in F9, we will normally assume that the project is being financed in the same way as the existing gearing of our company, and therefore – yes – on that assumption we would use the existing gearing of our company to regear the beta, and use this geared beta to arrive at a cost of equity for the project (and we would then use that to calculate a WACC for the project, but in F9 you are not asked to do this). I had thought that I had made this clear in my lectures, but I will check and record more if not. I hope that makes sense 馃檪.