Hi,
Thank you for the above explanation. I also need to know, how would it be if the questions says, only internally generated funds were used to fund a project (the company has both debt and equity currently)?
I’m assuming, internally generated means retained earnings (please correct me if im wrong)
Should APV be used since the gearing will increase due to retained earning going down?
But as per the above explanation, there aren’t any tax shields.
Thanks in advance.
