Question: 1. Explain with equation and graphs MM theory in the following cases: A. Perfect market B. Including tax in the analysis Vo =VLG +VTC Luc

1. Explain with equation and graphs MM theory in the following cases: A. Perfect market B. Including tax in the analysis Vo =VLG +VTC Luc Vosa WACC Wheret = value of a geared company = value of equity in an ungeared company Vote = tax shield C. Including bankruptcy cost Vog = Veug +V, Tc-E(/) KA DOR Where: Vad = value of a geared company Va = value of equity in an ungeared company VgTc = tax shield (7) = expected cost of bankruptcy 1. Explain with equation and graphs MM theory in the following cases: A. Perfect market B. Including tax in the analysis Vo =VLG +VTC Luc Vosa WACC Wheret = value of a geared company = value of equity in an ungeared company Vote = tax shield C. Including bankruptcy cost Vog = Veug +V, Tc-E(/) KA DOR Where: Vad = value of a geared company Va = value of equity in an ungeared company VgTc = tax shield (7) = expected cost of bankruptcy

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