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Sir for the question nahara of Dec 2014..
In order to find the mv of debt..we use pre tax cost of debt.. so in the lecture it is said that for investors they don’t get affected by tax and mv is determined by them.but for company it is post tax.. so I wanted to confirm with you we always have to use pre tax cost of debt when finding out mv of debt right?Yes, It is the investors who determine the market value by discounting the expected future dividends at their required rate of return, which is pre-tax.
Incidentally you can find lectures working through the whole of this question linked from the following page:
https://opentuition.com/acca/afm/afm-revision-lectures/
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