Tiêu đề FM Answer Test 3_key-combined (1).pdf ✅

Dheera Test Series [1] Suggested Answers/ Hints PART I 1. (c) ₹0.72 Computation of EPS under financial plan I: Equity Financing (₹) EBIT 37,50,000.00 Interest - EBT 37,50,000.00 Less: Taxes 40% (15,00,000.00) PAT 22,50,000.00 No. of equity shares 31,25,000.00 EPS 0.72 2. (b) ₹0.90 , ₹0.44 Computation of EPS under financial plan II: Debt – Equity Mix Computation of EPS under financial plan III: Preference Shares – Equity Mix Plan II Plan III EBIT 37,50,000.00 37,50,000.00 Less: Interest (14,06,250.00) - EBT 23,43,750.00 37,50,000.00 Less: Taxes (40%) (9,37,500.00) (15,00,000.00) PAT 14,06,250.00 22,50,000.00 Less: Pref. dividend - (15,62,500.00) PAT for equity shareholders 14,06,250.00 6,87,500.00 No. of Equity shares 15,62,500.00 15,62,500.00 EPS 0.90 0.44 3. (a) ₹28,12,500 EBIT – EPS Indifference Point- Plan I and Plan II: 2 M 2 M 2 M
Dheera Test Series [2] (EBIT) × (1 − TC ) N1 = (EBIT − Interest) × (1 − TC ) N2 (EBIT) × (1 − 0.40 ) 31,25,000 = (EBIT − 14,06,250) × (1 − 0.40 ) 15,62,500 0.6EBIT = 1.2 EBIT – 16,87,500 EBIT = ₹28,12,500 4. (d) ₹52,08,333.33 EBIT – EPS Indifference Point: Plan I and Plan III (EBIT) × (1 − TC ) N1 = EBIT(1 − Tc ) − Pref. Div. N2 (EBIT) × (1 − 0.4) 31,25,000 = EBIT(1 − 0.4) − 15,62,500 15,62,500 0.6EBIT = 1.2EBIT – 31,25,000 EBIT = ₹52,08,333.33 2 M

Dheera Test Series [4] Component of Capital Amount Weight Cost of Capital WACC Equity 23,00,000 0.46 0.2504 0.1152 Debt 27,00,000 0.54 0.12* 0.0648 Total 50,00,000 0.18 * Kd = 12% [since there is no tax] WACC = 18% [b] Assuming 40% taxes as per MM Approach Calculation of Value of Firms ‘Bee Ltd.’ and ‘Cee Ltd’ according to MM Hypothesis Market Value of ‘Cee Ltd’ [Unlevered[u]] Total Value of unlevered Firm [Vu] = [NOI [1 - t]/ke] = 9,00,000 [1 – 0.40]] / 0.18 = ₹ 30,00,000 Ke of unlevered Firm [given] = 0.18 Ko of unlevered Firm [Same as above = ke as there is no debt] = 0.18 Market Value of ‘Bee Ltd’ [Levered Firm [I] Total Value of Levered Firm [VL] = Vu + [Debt× Tax] = ₹ 30,00,000 + [27,00,000 × 0.4] = ₹ 40,80, 000 Computation of Weighted Average Cost of Capital [WACC] of ‘Cee Ltd.’ = 18% [i.e. Ke = Ko] Computation of Equity Capitalization Rate and Weighted Average Cost of Capital [WACC] of Bee Ltd 0.5 M 0.5 M 0.5 M 0.5 M 0.5 M