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Question - Three corporations Aashman Shumaila Fahim are identical and each has total assets of 1000 million Ashman is 1009% loan finance Shumaila has 09% interest bring debts and Fahim is equity is equal to value of assets. Tax rate is 50% on earning if the economics environment is goods all three firm shows operating income 1000 under average and poor economics environments operating income will be 500 and 250 million respectively.

Required -

1. Find out the interest rate when discount rate is 15%.

2. Find out the value of financial charges of all three companies.

Reference no: EM132934898

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