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Tax element in Cost of Equity
I often see two different formulas for CoE in practice:
CoE = Rf + MP * beta
where either MP is defined as:
1) MP = Rm - Rf
or
2) MP = Rm - Rf * (1-t)
Questions:
- What is the rationale for tax adjusting Rf in formula 2?
- Should Rf be tax adjusted when calulating MP?
- Does anyone know of an article discussing the issue? |
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发表于 2013-4-13 23:35
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