Constant Leverage And Constant Cost Of Capital: A Common Knowledge Half-Truth
A typical approach for valuing finite cash flows is to assume that leverage is constant (usually as target leverage) and the cost of equity, Ke and the Weighted Average Cost of Capital, WACC are also assumed to be constant. For cash flows in perpetuity, and with the cost of debt, Kd as the discount...
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| Format: | Article |
| Language: | Spanish |
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Universidad ICESI
2008-04-01
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| Series: | Estudios Gerenciales |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S0123592308700354 |