12. Net operating income `1,50,000 Total investment `10,00,000 Cost of equity: If the firm uses no debt
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12. Net operating income `1,50,000 Total investment `10,00,000 Cost of equity:
If the firm uses no debt 15%
If the firm uses `4,00,000 debentures 18%
If the firm uses `6,00,000 debentures 20%
Assume that `4,00,000 debentures can be raised at 10% rate of interest whereas `6,00,000 debentures can be raised at 12% rate of interest. You are required to calculate the market value of the firm and the overall Cost of Capital using Traditional Approach.
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Related Book For 
Financial Management
ISBN: 9789352605606
1st Edition
Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana
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