● 9. Company H and company I are in the same risk class and identical in all respects except H uses debt while I does not. Levered company has `18,00,000 debentures, carrying 10% rate of interest. Both the companies earn 20% before interest and taxes on their total assets of `30,00,000. Assume perfect capital market, tax rate of 50% and capitalisation rate of 15% for an all equity company.

(i) Compute the value of both the companies using NI approach.

(ii) Compute the value of both the companies using NOI approach.

(iii) Using NOI Approach, calculate the overall Cost of Capital of both the companies.