Vogel (6/14) – post acquisition earnings

Hi John,

Regarding this Vogel question, When we calculate the total post acquisition earnings that we add in the earnings of department A into Vogel, why do we not have to add back the net after tax effect of the portion of the interest expense belonging to 7% bond? The current earnings attributable to Department A included the interest expense, but after the acquisition department A should not have the interest expense belonging to this bond anymore and thus its earning after tax should be increased by 40 * 7% * 80% * 50%, right?

Thank you.