Hi all,
For the below -
Residual Income = Net operating profit after tax = (EBIT) *(1-T) – capital charge
Is it fair to say that capital charge will be based on Beginning BV of debt and equity - not current value?
Cheers
Hi all,
For the below -
Residual Income = Net operating profit after tax = (EBIT) *(1-T) – capital charge
Is it fair to say that capital charge will be based on Beginning BV of debt and equity - not current value?
Cheers
Yes.
Yes, both debt and equity book value.