Question: Assignment 2 - due date 13 Oct2x G Question 4 [20 Marks] The follow X wacc-sample.pdf x Course Hero C File C:/Users/user/Downloads/Assignment%202%20-%20due%20date%2013%20Oct%202021.pdf H Question

Assignment 2 - due date 13 Oct2x G Question 4 [20 Marks]

Assignment 2 - due date 13 Oct2x G Question 4 [20 Marks] The follow X wacc-sample.pdf x Course Hero C File C:/Users/user/Downloads/Assignment%202%20-%20due%20date%2013%20Oct%202021.pdf H Question 4 [20 Marks] The following information is available for two small companies Taxo Ltd. and Funa Ltd. Taxo Ltd. Funa Ltd. Net operating income 1 500 000 1 500 000 Interest on debt Cost of equity Nil 600 000 16% 16% Cost of debt 12% 12% Type here to search Note: In answering the questions below assume that the Net Income approach applies and there are no taxes. 4.1 Calculate: (i) The market value of equity, 1 H (ii) Market value of debt and (2) (iii) Total value of both the companies. (2) 4.2 Calculate the average cost of capital for each of the firms. (4) AB 8 Activate Windows Go to Settings to activate Windows. 19C Mostly sunny 19:46 2021/10/10

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