100%(1)1 out of 1 people found this document helpful
This preview shows page 4 - 8 out of 26 pages.
For high leverage firms with minimal proportion of equity capital, the discount rate (i.e., cost of capital as opposed to cost of equity) will be relatively more stable over time as it is less sensitive to the assumption on market risk. ii)for firms for which you have partial information on leverage, e.g. interest expenses are missing. iii)in all other cases, where you are more interested in valuing the firm than the equity.