Question 2a
Marking Guide
(a) PV of free cash flows Years 1–4 1
PV of free cash flows Years 5 onwards 2
Desired sales proceeds 1
Impact on statement of financial position 4
Impact on eps 5
Impact on WACC
Equity beta – cinemas 2
Revised cost of equity – cinemas 1
Revised WACC 1
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17
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