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Dear John,
I am finding the more questions I go over, the more confused I am with regards to when to use before or after tax cost of capital.
Are their any useful rules or mnemonics to help remember?
Many thanks
You cannot pass the exam by simply learning rules or mnemonics. The exam is the level of a masters degree!!
After-tax cost of capital is used when appraising investments. Before-tax cost of debt is used when calculating the market value of debt.
Have you watched all of my free lectures?
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