MM approach

Financial Management

Sir in MM approach with tax Value of levered firm=value of unlevered firm+debt * tax Yes,we get tax sheild on interest of debt in capital structure Then Why we multiple total debt value * tax rate instead taking interest on debt value*tax rate

Balaji R

CA Final

★ 20K+

04-Oct-21 22:49

992

Answers (2)

It is explained why in the last 5 lines of the same image that you attached - pls go through and let us know if you have any queries

Sriram Somayajula

Admin

05-Oct-21 10:55

Sriram Somayajula Admin

It is explained why in the last 5 lines of the same image that you attached - pls go through and let us know if you have any queries

Yes sir now got it. Thank you

Thread Starter

Balaji R

CA Final

★ 20K+

05-Oct-21 11:22