Q5) The following table shows the data regarding two companies, 'A' Ltd and 'B' Ltd. They...
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Q5) The following table shows the data regarding two companies, 'A' Ltd and 'B' Ltd. They both belonged to the same equivalent risk class: 'A' Ltd 40,000 2.6 30,000 20,000 Particulars Number of Equity Shares Market Price per share 10% Debentures Profit before Interest 20,000 Assume that the company distribute all the profits after interest by way of dividend. Explain, using MM Approach, how an Investor holding 20% shares in 'A' Ltd will be better off by 'B' Ltd switching his holding to 'B' Ltd. Note: Please dont provide 60,000 1.8 answers is Ms Excel Q5) The following table shows the data regarding two companies, 'A' Ltd and 'B' Ltd. They both belonged to the same equivalent risk class: 'A' Ltd 40,000 2.6 30,000 20,000 Particulars Number of Equity Shares Market Price per share 10% Debentures Profit before Interest 20,000 Assume that the company distribute all the profits after interest by way of dividend. Explain, using MM Approach, how an Investor holding 20% shares in 'A' Ltd will be better off by 'B' Ltd switching his holding to 'B' Ltd. Note: Please dont provide 60,000 1.8 answers is Ms Excel
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The MM ModiglianiMiller Approach is a theory in finance that suggests that under certain assumptions the value of a firm is independent of its capital ... View the full answer
Related Book For
Matching Supply with Demand An Introduction to Operations Management
ISBN: 978-0073525204
3rd edition
Authors: Gerard Cachon, Christian Terwiesch
Posted Date:
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