“Not immediately relate to curriculum, but theoretically how would you estimate the cost of equity for a private company.” technically, it is on the exam, if you think about book 5 and the unlevering of betas There ar many ways, including comparables and DCF (FCFE and FCFF). Id you did the latter, you would need the “right” beta so that you could get the right CAPM and later, the right WACC here is the kicker formula to keep in the back pcket Ba (unlevered) = Be/ [1 + (1-t)(D/E)] you do all this b/c when you compare firms, you want to pretend as if capital structure does not exist. This is the same reason the Street uses EBITDA – to back out the effects of cap x (creates depreciation) and debt (creates tax shields but also hits your Inc Stmt with interet expenses).