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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › M AND M THEORY OF CAPITAL STRUCTURE
This theory without tax has more cost then with tax (as with tax the interest is tax deductible) why is more without tax please help me
You have answered it yourself!!!
With tax, the company gets tax relief on the interest that they pay, and so the net cost to the company is reduced.
Have you watched the lectures on this?
(I have asked before if you have watched the lectures, but you have not answered! If you watch the lectures then all these points are explained.)
