The discount rate used in this method will be after-tax WACC. It has
The after-tax cost of debt will equal to KD*(1-t), where t is the tax rate.
at the levered equity beta.
14/12/2021, 12:55
(6) Unfolding Capital Cash Flow Valuation | LinkedIn
https://www.linkedin.com/pulse/unfolding-capital-cash-flow-valuation-parag-nawani/
5/8
Now, the after-tax WACC is calculated as:
After-tax WACC = D/V* KD*(1-t) + E/V* KE.
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