10-04-2010, 09:25 PM
Dear Michal,
When any company wish to start a project other then existing sector or other such an investment changes its Business as well as Financial Risks thats why current WACC could not be used as relevant discount factor to calculate relevant NPV of the Project. We have to calculate Risk Adjusted WACC (Project Specific WAAC). In this context, Beta is the relevant risk of the project that is to be incorporated in the current WACC to make a relevant discount rate.
Best Regards,
When any company wish to start a project other then existing sector or other such an investment changes its Business as well as Financial Risks thats why current WACC could not be used as relevant discount factor to calculate relevant NPV of the Project. We have to calculate Risk Adjusted WACC (Project Specific WAAC). In this context, Beta is the relevant risk of the project that is to be incorporated in the current WACC to make a relevant discount rate.
Best Regards,
