0.6 A company is expecting a net income of Rs. 3,00,000. It has Rs, 12,00,000, 9%
debentures. The equity capitalisation rate is 12%. You are required to calculate the value of
firm and overall capitalisation rate according to the Net Income Approach. (Ignore Taxation).
Also Calculate the value of the firm and overall capitalisation rate according to the Net
Income Approach iſ the debentare debt is decreased to Rs. 10,00,000,
15
Answers
Answered by
0
Solution:Net Income Rs. 2,00,000Less: Interest on 10% Debenture of Rs. 5,00,000 Rs. 50,000Earnings available to equity shareholders Rs. 1,50,000Market Capitalization Rate 12.5%Market Value of the Equity (S) = 1,50,000* Rs. 12,00,000Market Value of Debenture (D) Rs. 5,00,000Value of the Firm (S+D) Rs. 17,00,000 mark as brainliest
Similar questions