BPP Revision kit Q 228 MCQ

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May 21, 2018 at 2:20 pm #453135
meghaarora1
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Why is tax not deducted in the calculation of the market value of the loan note?
May 21, 2018 at 4:45 pm #453170
John Moffat
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As I stress in my lectures (because it is so common in the exam) it is investors who determine market values, and they are not affected by company tax.
Tax is only relevant when calculating the cost of debt to the company, because the company gets tax relief on the interest.
Please watch my free lectures. They are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
May 21, 2018 at 4:47 pm #453171
meghaarora1
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Ok sir. Thank you 🙂
May 21, 2018 at 4:49 pm #453173
John Moffat
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You are welcome 🙂
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