Just wondering if I can get some help here.
It’s regarding the reading 33 - EOC Question 29
The solution calculates Interest expense as
“Total assets * proportion of debts * pretax cost of debt”
to get Net Income and there is no adjustment for the tax. so I think the calculation should be
“Total assets * proportion of debts * pretax cost of debt * (1 - tax rate)”
Please advise if I am missing some bit here.
Thanks in advance.