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Sir the tax relief on interest has being calculated on the loan net of issue cost don’t we take the gross amount raised when calculating tax relief?
It depends on whether the issue costs are paid out of the amount raised (in which case the amount raised will be more that the amount needed for the investment), or whether the issue costs are paid out of existing funds (in which case the amount raised will be equal to the amount needed for the investment).
If it is not clear from the question, then (as always in Paper AFM) state your assumption clearly and you will still get the marks.
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