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For UP Ltd. EBIT is Rs 1,00,000, Cost of Debt is 10%, and outstanding debt is Rs. 4,00,000. If the capitalization rate (overall cost of

For UP Ltd. EBIT is Rs 1,00,000, Cost of Debt is 10%, and outstanding debt is Rs. 4,00,000. If the capitalization rate (overall cost of capital) is 12.5%. Find the value of the firm and the equity capitalization rate using NOI Approach. What would be the value of the firm and the equity capitalization rate if
(i) the firm increases the debt from Rs 4,00,000 to Rs 5,00,000 and
(ii) the firm decreases the debt from Rs 4,00,000 to Rs 3,00,000. Interpret the results and justify.

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