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The WACC approach to valuation is not as useful as the APV approach in leveraged buyouts because: a. there is greater risk with a LBO
The WACC approach to valuation is not as useful as the APV approach in leveraged buyouts because: a. there is greater risk with a LBO b. the future reductions in debt are known at the time of the LBO c. there is no interest tax shield with the WACC d. the value of the levered and unlevered firms are equal in an LBO e. WACC only applies to unlevered projects
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