BrightStar Limited, $(\text{'}$BrightStar$\text{'}),$ a property investment company, needs funding to acquire $70\%$ of the equity shares in Skyview Limited, another property investment company. The purchase price for these shares is R$3200000.$

Jabulani Nkosi, one of BrightStar's directors, offered BrightStar a loan of R$3000000.$ Jabulani entered into the loan agreement with BrightStar on $1$ March $2023.$ The loan agreement stipulates that BrightStar must repay R$200000$ every $6$ months and repay R$3200000$ on $28$ February $2025.$ The shares in Skyview Limited will be used as collateral for the loan.

BrightStar will use the dividends received from Skyview Limited to make repayments of capital and interest to Jabulani.

BrightStar has a February financial year$-$end. All parties are South African residents.

REQUIRED:

$3\mathrm{.}1$ Calculate the yield$-$to$-$maturity applicable to the loan agreement. Clearly show all your financial calculator inputs.

Round to three decimals.

$(3$ marks$)$

$3\mathrm{.}2$ Calculate, separately for the $2024$ and $2025$ years of assessment, the interest that BrightStar Limited may deduct from the taxable income by applying the yield$-$to$-$maturity method.

Round up to two decimals.

$(8\mathrm{.}5$ marks$)$

$3\mathrm{.}3$ Compare the total interest calculated in question $3\mathrm{.}2.$ with the total interest deemed to be accrued according to cash flows.

$(3\mathrm{.}5$ marks$)$

Briefly discuss the deductibility of the interest incurred by BrightStar Limited in respect of the loan to purchase the shares of Skyview Limited.

Support your answer with references to the relevant sections of the Income Tax Act.

$(6$ marks$)$

Communication skill: Clarity of expression

$(1$ mark$)$