Question

Levered, Inc. and Unlevered, Inc., are identical in every way except their capital structures. Each company expects to earn $18 million before interest per year in perpetuity, with each company distributing all its earnings as dividends. Levered's perpetual debt has a market value of $65 million and costs 8 percent per year. Levered has 1.9 million shares of stock outstanding that sell for $98 per share. Unlevered has no debt and 3.8 million shares outstanding, currently worth $71 per share. Neither firm pays taxes. Is Levered's stock a better buy than Unlevered stock? 9

Answer 1

ye 9 kaha ki jarurat hai aur kya hai awaj hai ki jarurat hai aur kya hai awaj hai ki jarurat hai aur kya hai awaj hai ki jarurat hai aur kya nahi 3333