ACCA F9 Revision Download F9 Question Paper
ACCA F9 December 2014 Section B Question 2
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Also you said that when calculating MV we should use the pretax cost of debt, so when calculating the cost of debt we should discount at an after tax rate?
The cost of debt is what you want to determine and so you can’t discount at it!!
The cost of debt is the IRR of the after-tax flows.
Ok thanks a lot!! 馃檪
You are welcome 馃檪
Ok thanks a lot John actually its been a while since i watched your lectures and as im also sitting p1 and p7,i dont think i have time to watch them again.
I sat f9,p2 and p3 in dec and passed p3 and p2 but failed f9 as i was so physically drained as f9 was the last one.
Hoping that the revision will let me recall the bits ive forgotten.
Thanks a lot.
No – not right.
The market value is determined by the investors and they are not affected by company tax.
Tax is only relevant when calculating the cost of debt to the company.
I do stress this in my free lectures on the valuation of debt.
HI John,
Just wanted to clarify that if we had been given tax rate then we would have deducted it from interest in this question right?
Furqan