In the first question of the Q1 exam, the answer key calculates the pre-tax return by first adjusting for tax and then adding the inflation rate yielding a return requirement of 9.625%. I’d say you should first add inflation and then adjust for tax, giving 10.625%? Any suggestions?
do it there way.
I agree with you too i.e. we should add inflation before adjusting for taxes but unfortunately we got to do it their way to score.