- This topic has 1 reply, 2 voices, and was last updated 1 year ago by .
- You must be logged in to reply to this topic.
Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
shouldnt the 6% be tax deductable? 6 x 0.7 = 4.2 ?
Tax is not relevant when calculating the return to investors (in part (a) of the question) because investors are not affected by company tax.
It is relevant when calculating the cost of debt to the company (because the interest does save tax).
I explain this in the lectures working through both parts of the question (and the answer is of course printed in the free lectures notes as well).