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In advance of undergoing any project, it needs to find out about the price of fairness, expense of personal debt and weighted regular expense of cash of its existing gearing and qualified gearing targets to appraise its investments.
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Large gearing cuts down the WACC, but It's not at all usually the case. At times the financial debt financing is high enough that case the increase in the expense of equity nullify the debt funding impact on WACC or at times it boosts the WACC in case of larger personal debt financing.
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