solve the fifth question step by step

(ii) Compute the value of the two firms using using NOtapproach. MM 5. A company's current operating income is Rs. 400,000 . The firm has Rs. 1000,000 of 10% debt outstanding. Its cost of equity capital is estimated to be 15%. a. Determine the current value of the firm, using traditional valuation approach; b. Calculate the firm's overall capitalization rate; c. The firm is considering to increase its leverage by raising an additional Rs.500,000 debt and using the proceeds to retire that amount of equity. As a result of increased financial risk, KD, is likely to go up to 12% and KE to 18%. Would you recommend the plan? XYZ Manufacturing Co., has a total capitalization of Rs.1000,000 and normally earns Rs.100,000 EBIT. The financial