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Tax deduction doubts

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Tax deduction doubts

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  • July 31, 2018 at 8:36 pm #465467
    ajithgthakkan
    Member
    • Topics: 3
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    • ☆

    Sir,
    1) Why do we deduct tax from the cost of debt in WACC when we have already found out the cost of debt using the after tax interest?

    2) Why do we deduct tax from the market value of debt in the ungearing of beta calculation?

    Ve/(ve + Vd(1-T)) * beta

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