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Cost of debt in statement of CF

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    • Avatar of vincenttvincentt
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        • CFA Level 3
        10 Apr 2017 at 9:45 am
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        Is the cost of debt stated under the Statement of Cash Flows after taxed figure?

      • Avatar of vincenttvincentt
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          • CFA Level 3
          10 Apr 2017 at 3:59 pm
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          okay all good now… found the reason why.

          http://www.schweser.com/news/news_updates.php?new_level=cfa2&type=schweser#practice_exams_vol_1

          Practise Exams, Vol. 1,
          Page 17: The cost of debt of 4.50% given in the last exhibit should be listed as after-tax.
          Posted: 2013-03-18

          :-w

        • Avatar of ReenaReena
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            • CFA Charterholder
            10 Apr 2017 at 12:09 pm
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            I don’t think so @vincentt. In cash flow statement, the outgoing interest (cost of debt) you pay is the full cash amount, which reduces the taxable profit, and reflected as less taxes in Income Statement.

          • Avatar of vincenttvincentt
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              • CFA Level 3
              10 Apr 2017 at 3:51 pm
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              hmmm… that’s bad… i convert it to a after tax figure to get WACC (to calculate the value to firm) but the solution just add the actual figure.

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