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What is Capital Structure Theories and Planning about?
Here are the calculations under the NOI approach for the 3 debt options given: Debt = Rs. 300,000 Value of firm (V) = EBIT/Ko = Rs. 200,000/0.1 = Rs. 2,000,000 Ke = (EBIT - Interest)/ (V - Debt) = (200,000 - 18,000)/ (2,000,000 - 300,000) = 0.1 Debt = Rs. 400,000 V = Rs. 2,000,000 Ke = (200,000 - 24,000)/ (2,000,000 - 400,000) = 0.1 Debt = Rs
- Author
- Veeresh Madival Vm
- Language
- EN