Three companies ET plc, Ant plc, Tiger plc operate in the same type of business and hence incur similar operation risks. However, the companies have different capital structure as described in the following tables.

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number issued Ordinary shares nominal value Market Price Dividend per per share per share share ET plc 400,000 $ 1 1.39 0.25 Antick 1,000,000 $ 0.25 0.49 0.09 Tiger 1,000,000 $ 0.5 0.38 0.08 Debentures Total nominal value nominal value Per bond ET plc Ant plc Tiger plc 0 Price nominal Int Rate $100,000 $250,000 $100 $72 10% $100 $53 8% Current levels of dividends are generally expected to continue indefinitely. The debenture of Ant and Tiger are not redeemable. Dividends are stated net of imputation of tax. All prices as quoted as ex dividend or interest; dividend and interest payments are paid annually. Assume the corporation tax is 50%. number issued Ordinary shares nominal value Market Price Dividend per per share per share share ET plc 400,000 $ 1 1.39 0.25 Antick 1,000,000 $ 0.25 0.49 0.09 Tiger 1,000,000 $ 0.5 0.38 0.08 Debentures Total nominal value nominal value Per bond ET plc Ant plc Tiger plc 0 Price nominal Int Rate $100,000 $250,000 $100 $72 10% $100 $53 8% Current levels of dividends are generally expected to continue indefinitely. The debenture of Ant and Tiger are not redeemable. Dividends are stated net of imputation of tax. All prices as quoted as ex dividend or interest; dividend and interest payments are paid annually. Assume the corporation tax is 50%.