Show the basis of weightings, Financial Accounting

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Q. Show the Basis of weightings?

(i) Both costs of capital (Ke and Kd) as well as the WACC have been calculated using current   ex-dividend (ex-interest) market values rather than statement of financial position/nominal values.

(ii) This is to make sure that a current market cost of finance is determined rather than an historic cost. Preferably a future WACC is wanted to discount future project cash flows and the current WACC based on current market rates is the best estimate for this.


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