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e. CAGR (compound regular advancement return). A cash investor is definitely thinking about The web return attained 12 months immediately after year, Hence utilization of geometric is a lot more correct. As a result we would use geometric normal for chance free of charge rate and risk high quality for every from the three divisions, as provided in exhibit 5 from the case.

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The two inputs are Therefore the debt ratio in full cash as well as relevant personal debt servicing Price. The price of personal debt for many of the divisions of MC is calculated utilizing the below two inputs;

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