Homework Answers
| a) | Value of operations = 100000/(0.11-0.07) = | $ 25,00,000 |
| b) | Company's total value = Value of operations+Non-operating marketable securities = 2500000+325000 = | $ 28,25,000 |
| c) | Value of common equity = Company's total value-Value of long term debt = 2825000-1000000 = | $ 18,25,000 |
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