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I watched the complex trading course as well as the finance 101 and corporate valuation course, yet I still have a question regarding the WACC calculation of the complex trading comps:
Why do we use the average un-levered beta of the industry rather than WMT’s specific beta? I understand why one would use the average if you have private company and you want to calculate the WACC for it. But in a stand-alone valuation for a publicly traded firm (the resulting WACC is used in for the stand-alone DCF valuation of WMT) I don’t see why I need to use peers to come up with an industry beta that I then re-lever?
Thanks a lot for your explanation! Read More