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Sir,
See BPP exam kits, number 87 MCQ bank, number 87.7 , see the answers, why when calculating the interest of $9, it had not take into consideration the 30% of corporation tax ?It is investors who fix the market value (as the present value of future receipts discount at investors required rate of return).
Corporation tax is not relevant for the investors – they receive the full interest. It is only relevant when calculating the cost of debt borrowing to the company.
You should watch the free lecture on the valuations of equity and of debt.
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