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In the proposed solution, the examiner calculates Cost of Debt using IRR approach. Tax relief (1-T) is not taken into account. Even, explicitly it is written Cost of debt is 6.48% (which should be the Return to Investors).
However, after that in WACC calculation tax relief is considered.In your lectures, you explained very thoroughly this topic. I assume that we should take into account tax relief (1-T), at the time when we calculate IRR (Cost of debt) for redeemable debt?
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