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You are the CFO of TrojanCo and have presented a discounted cash flow (DCF) valuation to the Board of Directors (Board). A Director notices that

You are the CFO of TrojanCo and have presented a discounted cash flow (DCF) valuation to the Board of Directors (Board). A Director notices that in the WACC calculation the estimated market equity value of the firm was used rather than the firms book equity value. Explain the difference between the two and why using market value this is the correct methodology. (6-150W)

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