13. The following data are related to I Ltd. and W Ltd. belonging to the same risk...
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● 13. The following data are related to I Ltd. and W Ltd. belonging to the same risk class.
Particulars I Ltd. W Ltd.
No. of ordinary shares (`10 each)
Market price per share (`)
6% debentures (`)
Profit before interest (`)
9,00,000 12 60,00,000 18,00,000 15,00,000 10 Nil 18,00,000 All profits after interest are distributed as dividend. You are required to explain how under M-M approach an investor holding 1% shares in I Ltd. will be better off in switching to W Ltd.
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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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