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as per Q2) Ahan and co. has earning before interest and taxes of 24.00.000. The firm currently has outstanding...

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as per Q2) Ahan and co. has earning before interest and taxes of 24.00.000. The firm currently has outstanding debt of 215,00,000 at an average cost, Kd of 10%. Its cost of equity capital ke. is estimated to be 16%. Determine the current value of firm using the traditional value valuation approach. Determine the firm's overall capitalization rate .Ko The firm is consideration to issue capital of * 5,00.000 in order to redeem 25.00.000 debt .The cost of debt is expected to be unaffected .However, the firm's cost of equity capital is to be reduced to 14% as a result of decrease in leverage .Would you recommend the proposed action i) ii)

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i Determining the current value of the firm using the traditional value valuation approach The tradi View the full answer


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Equity Asset Valuation

Equity Asset Valuation

ISBN: 978-0470571439

2nd Edition

Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen

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Posted Date: April 03, 2023 01:28:17
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