Hello SIR
Hope you are fine
there is lil confusion in chapter 17 Cost of capital in example 7,8,9
Example 7 part a required----return to investors?
and in free video you calculated as (not tax deduct) by giving reason as investors are not get tax relief.
But sir in example 9 part a: REQUIREMENT is totally same as in EX;7 part a.
but you deduct tax (1-t)..
I dont understand there is any error in video
Or any error in myself..
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Free lecture notes
8y ago#1There is no error.
From memory I don't think I work through part (a) in the video lecture, but the answer in the lecture notes shows both part (a) and part (b).
For part (a) we are calculating the return to the investors, so tax is not relevant. For part (b) we are calculating the cost to the company, and so tax is relevant.
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