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please help me 3. (Optional question) Prove the adjusted present value (APV) method is the foundation for the weighted average cost ofcapital (WACC) method. Specifically,
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3. (Optional question) Prove the adjusted present value (APV) method is the foundation for the weighted average cost ofcapital (WACC) method. Specifically, in order to use the WACC method properly, one needs to solve the following system of equations (1)-(4), where the exogenous variables are C,t D and rA and the endogenous variables are PV, WACC, E, and TE C(1 -t) WACC PV- D+E D+E PV-D+E (WACC) Solve the system of equations (1)-(4) and show the solution to PV is + Dt (APV)Step by Step Solution
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