APV – Financing side effects

Hi John,

I noted that when we use the APV method, the cash flow are discounted at the ungeared cost of equity for the project, and the resulting NPV is then adjusted for financing side effects such as issue costs or tax shield on debt interest.
I have perused but not clarified for the term “financing side effects”. Could you please explain it and give me the examples relevant to them then we can identify in the exam?

Thank you very much.