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19. The earnings before interest and tax of A Ltd is 37,20,000 when its investment in assets is 340,00,000. It has the capacity to raise

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19. The earnings before interest and tax of A Ltd is 37,20,000 when its investment in assets is 340,00,000. It has the capacity to raise debt at 12%. (a) If equity capitalisation rate is 18%, calculate the value of the firm and the overall cost of capital if the value of debt is 12,00,000 under Net Income Approach. (b) If equity capitalisation rate is 15%, calculate the value of the firm and the overall cost of capital if the value of debt is 12,00,000 under Net Operating Income Approach. [5+5=10]

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