Question 2 Queston 3

NOI 1500000 EBIT 4000000

Debt 30000000 Tax 0.4
Interest 0.03 Ki 0.12
Interesr 900000 ke 0.22
Dividends 600000 Debt 6000000
ke 0.15 ke=DIV/MVE

ke=Div/MVE PV TAX benefit 6000000*0.4

2400000
0.15=600000/MVE
MVE=600000/0.15
MVE 4000000
TV=MVD+MVE
TV=30000000+4000000
TV=34000000

Ko=NOI/TV
Ko=1500000/34000000
Ko 0.044118 4.411765
 M&M Debt 6 M
EBIT 4000000 4000000
Interest 0 720000
EBT 4000000 3280000
TAX 1600000 1312000
EARNINGS 2400000 1968000
Dividends 2400000 1968000

All equity Financed Value ke=Div/MVE

MVE=Div/ke
MVE=2400000/0.22
MVE 10909091

LEVERED FIRM Value VLF= value unlevered + PV DEBT Tax - BC

VLF=10909091+2400000-300000
VLF 13009091