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Estimate wacc instead of the book value

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Reference no: EM132613387

A. The WACC is an estimate. Explain what the risk is of estimating the WACC lower than a company's actual WACC and the risk of estimating the WACC higher than the actual WACC.

B. Why do we use the market value of debt and equity to estimate WACC instead of the book value?

Reference no: EM132613387

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