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Hi Dear,
Plz tell me why in this Q using asset beta of the printing industry as equity beta to calcuate cost of equity by CAPM ?
and in tax shield calculation discount at the risk free rate not the cost of debt?
Thanks !I do not have the BPP kit and so I cannot answer your first question.
However with regard to the tax shield, you will get the marks whether you use the risk free rate or if you use the cost of debt. It will give a different answer, obviously, but either is allowed (there are arguements both ways!).
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