In the refunding decision, differential cash flows are discounted at the after-tax cost of debt. Explain why

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In the refunding decision, differential cash flows are discounted at the after-tax cost of debt. Explain why these cash flows are not discounted at the average cost of capital.
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Fundamentals Of Financial Management

ISBN: 9780273713630

13th Revised Edition

Authors: James Van Horne, John Wachowicz

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