XYZ Ltd., experts a net income of $150,000. The company has 10% 500,000 debentures. The equity capitalization rate of the company is 10%. g (a) Calculate the value of the firm and overall capitalization rate accordin t the net income approach (ignore income tax). (b) If the debenture debt is increased to $750,000 and interest of debt i n change to 9%. What is the value of the firm and overall capitalizatio rate?

XYZ Ltd., experts a net income of $150,000. The company has 10% 500,000 debentures. The equity capitalization rate of the company is 10%. g (a) Calculate the value of the firm and overall capitalization rate accordin t the net income approach (ignore income tax). (b) If the debenture debt is increased to $750,000 and interest of debt i n change to 9%. What is the value of the firm and overall capitalizatio rate?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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