company X company y are listed on the johannesburg stock exchange. the two companies are...
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company X company y are listed on the johannesburg stock exchange. the two companies are similar in every respect except that company y is geared while company x is not.
| company x | company y | |
| net operating income | 12 000 000 | 12 000 000 |
| debt interest | - | 2 000 000 |
| cost of equity of ungeared firm | 20% | |
| risk free rate interest rate | 15% | |
4.1 using MMI what is the value of company x?
4.2 calculate the value of company y earnings?
4.3 calculate the value of company y equity ?
4.4 calculate the value of company y debt ?
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