How to calculate Capital Structure Finance

This video will help you to calculate Capital Structure questions, if you want more lectures and videos you can visit: in and you will have notes for most of the subject…
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2 Responses

  1. allaboutthepump says:

    1-tax isn’t tax shield from interest…it is just after tax earnings of
    unlevered firm…this is free cash flow you then discount by return on
    equity for unlevered firm….to get present value of unlevered
    firm…present value of tax shield is the tax rate x debt term….that is
    only used on the levered calculation….this is just a worked example
    (helpful) but not actually explained at all…just read out

  2. Albina Zabiorova says:

    actually, i didnt get why in step#1, in order to determine V(unlevered) we
    use (1-TAX), as firm is unlevered there is no debt, so there is no tax
    shield. i suppose there should be just EBIT/0,2=5.000.000 without (1-0,35),
    moreover EBIT is not associated with capital structures in this case,
    EBIT(unlevered)=EBIT(levered). pls tell me and explain me if i am not
    right. tx

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