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1. In the case of equity, dividend is paid from after-tax profits. Therefore, while working out the WACC, cost of equity is worked out before tax. That is by grossing up the dividend rate. For example, if tax rate is 30%, the grossing up is done this way:
Dividend rate * 100/70
2. In cash inflows, operating income should be shown on before tax basis.
3. If you proceed this way, hope there will be no problem. .
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