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Overall cost of capital of the firm according to net

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Alpha Ltd is expecting an annual earnings before interest and tax of 1.5 Lakhs. The company has 10% debentures of 4 lakhs and cost of Equity capital is 12%. Calculate the total value of the firm and the overall cost of capital of the firm according to Net

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NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Corporate Finance

Internal Assignment Applicable for June 2020 Examination

Income Approach. Also comment what will happen to the value of the firm and the overall cost of capital if debt is increased in the capital structure.

Reference no: EM132535208

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