QUESTION ONE a). Outline the areas in which the Auditors may prejudice...
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Accounting
QUESTION ONE
a). Outline the areas in which the Auditors may prejudice the position of shareholders and the solutions to the problem. (6 marks)
b). Assume you are given the following information
|
| C | D |
| EBIT | 100,000 | 100,000 |
| 4% DEBT INTEREST | 0 | 12,000 |
| Ke | 7% | 10% |
Determine the value of firm C and D (4 marks)
Assume that an investor owns 20% in any of the firms, determine how the investor will practice the arbitrage process (5 marks)
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