WACC and Taxes If I use the after-tax cost of debt for my project analysis then I
Question:
WACC and Taxes ‘If I use the after-tax cost of debt for my project analysis then I should use the after-tax cost of equity as well.’ Do you agree with this statement? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (1 review)
Answer No it is not necessary to use the aftertax cost of equity if you are using the aftertax cost ...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
Question Posted:
Students also viewed these Business questions
-
Lovato reports that they began using alcohol as an adolescent to become more popular and to deal with bullying. Does this idea fit with what is known about the etiology of substance use disorder?...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Assignment Overview This project consists of determining the current weighted average cost of capital for a publicly traded firm. Please read the information below. The Problem As new analysts in the...
-
On November 1, 2020. Cheng Company (a U.S.-based company) forecasts the purchase of goods from a foreign supplier for 280,000 yuan. Cheng expects to receive the goods on April 30, 2021, and make...
-
Determine whether the equation is an identity, a conditional equation, or a contradiction. 1. 2(x 2) = 2x - 4 2. 2(x + 3) = 2x 2 3. 3(x 2) + 2x = 2(x + 3) 4. 5(x 1) 2x = 3x 5
-
Either school dropout programs are not as effective as they could be, or they provide basic thinking skills and psychological counseling to their students. Either school dropout programs are not as...
-
Depending on the availability of parts, a company can manufacture 3, 4, 5, or 6 units of a certain item per week with corresponding probabilities of 0.10,0.40, 0.30, and 0.20. The probabilities that...
-
Data for the seven operating segments of Amalgamated Products follow: Included in the $105,000 revenue of the Bicycles segment are sales of $25,000 made to the Sporting Goods segment. Required a....
-
Review the following scenario: You work in customer service for the local bus station. A bus is running over an hour late due to mechanical issues. Customers are getting very angry and complaining...
-
If you use the equity beta and the security market line to compute the discount rate for a project, what assumptions are you implicitly making? What are the advantages of using the SML approach to...
-
The beta of Ericsson, the Swedish communications technology firm, is 0.70. What do you think is the main determinant of Ericssons beta and why?
-
The following items appear on a bank reconciliation. Classify each item as (a) An addition to the bank balance, (b) A subtraction from the bank balance, (c) An addition to the book balance, (d) A...
-
You pay 20% down on a home with a purchase price of $180,000. Your bank will loan the remaining balance at 7% APR. You have an option to make annual payments or monthly payments on the loan. Both...
-
A Dow Chemical bond carries a 9 percent coupon, pays interest semiannually, and has 10 years to maturity. What is the bond's yield to maturity if the bond is selling for $937.75?
-
Calculate Payback Period based on the following information (Also show the calculation/steps on how you got the answer): Initial cash outflow: $40,000 Cash inflows of $8,500 per year for the next...
-
Dominique purchases a new car for 60,000. If she makes a down payment of X, she will be faced with 48 level end of month payments with the nominal interest rate being 9.6% convertible monthly. If she...
-
Balance Sheet December 30, 2022 Current assets Cash $26.000 Accounts receivable 35,200 Prepaid insurance 6,000 $ 67,200 Equipment (net) 201,000 Total assets $268,200 Current liabilities Accounts...
-
IBMs Report of Management IBMs 2008 annual report includes the following selected paragraphs from its Report of Management found on page 58: IBM maintains an effective internal control structure. It...
-
Accounting policies and practices that are most important to the portrayal of the companys financial condition and results, and require managements most difficult, subjective, or complex judgments...
-
Using Miller-Orr the variance of the daily cash flows for the Pele Bicycle Shop is $840,000. The opportunity cost to the firm of holding cash is 7 percent per year. What should the target cash level...
-
Using bat all night corporations has determined that its target cash balance if it uses the BAT model is $2,600. The total cash needed for the year is $23,000, and the order cost is $10. What...
-
Credit Instruments Describe each of the following: a. Sight draft b. Time draft. c. Bankers acceptance. d. Promissory note. e. Trade acceptance.
-
How many memory accesses are required by a memory instruction?
-
A memory management system uses TLB (Translation lookaside buffer) to enhance memory access time. If time to access a TLB is x nanoseconds and time to access main memory is y nanoseconds (y >>x),...
-
What is the best thing a programmer can do to improve memory access time? How does it improve memory access time?
Study smarter with the SolutionInn App