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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Specimen exam 2016 Q 27
Dear Tutor,
could you please help me why do we have to use the before – tax average cost of capital and not after – tax to calculate the equivalent annual cost ?
It is because the question says to ignore tax (and the answer states this as well in the first line) 🙂
Usually we would use the after-tax cost of capital, but here the question tells you to ignore it.
Thank you very much for your quick reply.
You are welcome 🙂
