Q) Three corporations Albert, Shawn and Frazier Alberts Total Assets = 100 million Shawns T.A = 100 million Frazier T.A= 100 million Albert equity finance = 100% Shawn equity finance= 0% Frazier equity = Value of his assets. Tax rate is 25%

on earning if the economics environment is goods all three firm shows operating income 100 under average and poor economics environments operating income will be 50 and 25 million respectively.

Required

• Find out the interest rate when discount rate is 15%
• Find out the value of financial charges of all three companies
• Find out the value of sales if all three companies operating income is 10% of cost of goods sold, cost of goods sold is equal to gross profit in all economics environments