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John Moffat.
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surajsusheel
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Hi, I have the following doubts
1) if i deducted Mvd instead of multiplying by 75%, will that be wrong?
2) how is the MVd 400? the cost of debt increases by 0.3% if the unbundling takes place, wont that change the Market value?
John Moffat
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1. It would be wrong (although you would not lose all the marks 🙂 ) because the question does say that they will maintain their capital structure (i.e. maintain the ratio).
2. It is for the same reason as (1) in that if they maintain the capital structure then the MV of the debt will have to be 1/3 of the market value of the equity,
surajsusheel
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