Hi John,
Thank you for your support all the time.
Regarding Fubuki question, should the tax benefit from debt be discount at average cost of debt?
Which is:
5.5%x 80% + 7.5% x 20% = 5.9%
Thank you!
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Fubuki - 2010- Discount tax shield impact
6y ago#1No. You either discount at the normal borrowing rate (which here is 7.5%) or at the risk free rates (which here is 4.5%). The examiner always accepts either (even though obviously the final answer is different).
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