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Fast and detailed solution There are two company N Ltd. and M Ltd., having same earnings before interest and taxes i.e. EBIT of * 20,000.M

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There are two company N Ltd. and M Ltd., having same earnings before interest and taxes i.e. EBIT of * 20,000.M Ltd. is a levered company having a debt of *1,00,000 @ 7% rate of interest. The cost of equity of N Ltd. is 10% and of M Ltd. Is 11.50%. Find out how arbitrage process will be carried on

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