10. A Ltd. and B Ltd. are identical, except for Leverage. They earn same Operating Profit of...

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● 10. A Ltd. and B Ltd. are identical, except for Leverage. They earn same Operating Profit of `16,00,000 before tax. A Ltd. has `50,00,000 in 10% debt while company B is entirely financed by equity.

Assuming a tax rate of 40% and capitalisation rate of 16% for an all-equity company, compute the value of business by:

(i) NI approach and

(ii) NOI approach.

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Financial Management

ISBN: 9789352605606

1st Edition

Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana

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Question Posted: Jul 24, 2024 03:04 AM

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10. A Ltd. and B Ltd. are identical, except for Leverage. They earn same Operating Profit of...

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Financial Management

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