Best way of understanding.. i watched so many videos but THIS IS BEST OF ALL...Thank you sir...Ur presentation and way to explaining the things are awesome...

@carajaclasses

6 жыл бұрын

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I don't know if I'm a noob or something... but the second half went over my head.

@CAkeshav_lohia99

5 жыл бұрын

Mee too

@bairwakaran2553

4 жыл бұрын

same here :(

@TARUNDEEP444

4 жыл бұрын

😂😂 same

Can you please explain why we are borrowing 10000 to acquire 10% debt at 7%. I'm not understanding that part.

Thank you so much, sir. The way you deliver the lectures is totally exceptional. In 8.41 minutes, you cleared all my doubts. Keep growing ✌

@carajaclasses

5 жыл бұрын

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This 8 minutes , clears my all doubt about the arbitrage

@carajaclasses

5 жыл бұрын

I am glad that you liked my lectures. You can also Whatsapp me through this link for any queries - or simple text LECTURES to subscribe to our Whatsapp Lectures wa.me/917736022001 Do check FINANCIAL MANAGEMENT A COMPLETE STUDY carajaclasses.com/FMACS.html course for comprehensive lectures. Check out our other courses from website www.carajaclasses.com "Never stop learning, because life never stops teaching"

how is investment in levered firm fetching 10%return?

how is the investment in levered firm fetching 10% return?

sir, so much thankful to you, i spent a couple of hours in Khan&Jain, still found it a lot confusing to understand. i though to visit youtube and learn it. went through 2 videos, your being the second one and i understood it real good!! it was so nice of you to make such a wonderful detailed explanation to help others. thank you once again sir!! you saved a lot of time for me, no need to study those lengthy 3-4 pages. spending 10 mins on this video is more than sufficient. :)

@carajaclasses

5 жыл бұрын

I am glad that you liked my lectures. You can also Whatsapp me through this link for any queries - or simple text LECTURES to subscribe to our Whatsapp Lectures wa.me/917736022001 Do check FINANCIAL MANAGEMENT A COMPLETE STUDY carajaclasses.com/FMACS.html course for comprehensive lectures. Check out our other courses from website www.carajaclasses.com "Never stop learning, because life never stops teaching"

Sir your explanation is mindblasting... Awesome brilliant.... Hats off u

@carajaclasses

6 жыл бұрын

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After doing arbitrage process ..the value of levered and unlevered firm will be equal isn't it?

thanks for your nice explanation

Dear Sir, could you please explain, the reverse arbitrage process i.e. if the investor switch his from unlevered firm to levered?

6:38 Sir can we know the reason that why such assumption is taken to borrow 10 % of debt ?

@Richdadpoordad-oh8gp

Ай бұрын

You borrow so that you can invest in the unlevered firm N as 10% of unlevered firm's equity = 20000 But you only sold 10% of levered firm M = 11304.30 so you need more money and you borrow 10% debt from M = 10% of 100000 = 10000 Total funds available to u = 10000 + 11304.30 = 21304.30 Now you can invest in equity shares of N and have a surplus remaining (21304.30 - 20000 u invested) = 1304.30 surplus

That was a great explanation of the arbitrage process, thank you!

@carajaclasses

7 жыл бұрын

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@carajaclasses

7 жыл бұрын

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Kindly make video on arbitrage gains where taxes are applicable

Sir while calculating return on investment in leveredco M the ke is 11.5% not 10%

Thanks a lot sir It help me alot Keep uploading such videos

@carajaclasses

6 жыл бұрын

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@viralshah8417

6 жыл бұрын

Yes sir ....

At least explain where you got the value of debt from

confused..... one value or one firm having higher value and other value having ...?

Sir please solve the problem on Arbitrage process

Awsome sir... Thank you

@carajaclasses

5 жыл бұрын

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Ty sir neat presentation :)

@carajaclasses

5 жыл бұрын

I am glad that you liked my lectures. You can also Whatsapp me through this link for any queries - or simple text LECTURES to subscribe to our Whatsapp Lectures wa.me/917736022001 Do check FINANCIAL MANAGEMENT A COMPLETE STUDY carajaclasses.com/FMACS.html course for comprehensive lectures. Check out our other courses from website www.carajaclasses.com "Never stop learning, because life never stops teaching"

Why would he borrow 10000 from the bank , since he has 11304.3 available with him but needs to hold 10% in The unlevered ie 20000 . So shouldn't he just borrow the difference between 20000 and 11304.3 instead of 10000 ?

@drprashantdash

7 жыл бұрын

Sal Bhonsle that's the question which bothers most students. But the excess has been borrowed to show the advantage of arbitrage. So at the end the investor is left with a "surplus"

@carajaclasses

7 жыл бұрын

basically to show he lands in surplus by having same level of stake in other firm as well.. borrowing exactly for the difference would not lead to any surplus but same level of Return

@carajaclasses

7 жыл бұрын

basically to show he lands in surplus by having same level of stake in other firm as well.. borrowing exactly for the difference would not lead to any surplus but same level of Return

Why is it earnings before interest minus interest?....Should not it be after minus interest?

@chemseddinechemingui6121

6 жыл бұрын

Ke= netincome(EBIT-Interest)/value of equity ==> value of equity= netincome/Ke

Sir, how do we know that we should borrow ₹10000 only? I mean we could've borrowed more money and invested in the unlevered firm to get more money.

@Richdadpoordad-oh8gp

Ай бұрын

Remember that you have to pay more interest too

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Tqq so much...

@carajaclasses

6 жыл бұрын

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Thank you

@carajaclasses

7 жыл бұрын

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Thankyou sir .

@carajaclasses

5 жыл бұрын

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Impressed ✌🏻✌🏻

@carajaclasses

5 жыл бұрын

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Thanks alot sir

@carajaclasses

5 жыл бұрын

I am glad that you liked my lectures. You can also Whatsapp me through this link for any queries - or simple text LECTURES to subscribe to our Whatsapp Lectures wa.me/917736022001 Do check FINANCIAL MANAGEMENT A COMPLETE STUDY carajaclasses.com/FMACS.html course for comprehensive lectures. Check out our other courses from website www.carajaclasses.com "Never stop learning, because life never stops teaching"

Best teacher for ever

@carajaclasses

5 жыл бұрын

I am glad that you liked my lectures. You can also Whatsapp me through this link for any queries - or simple text LECTURES to subscribe to our Whatsapp Lectures wa.me/917736022001 Do check FINANCIAL MANAGEMENT A COMPLETE STUDY carajaclasses.com/FMACS.html course for comprehensive lectures. Check out our other courses from website www.carajaclasses.com "Never stop learning, because life never stops teaching"

Great explanation

@carajaclasses

4 жыл бұрын

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Good work sir

@carajaclasses

6 жыл бұрын

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How the bank rate is exactly 7% ? Is there any logic ?

@asiyarasool100

5 жыл бұрын

It assumes that the investor would be able to borrow at the same rate at which it has invested in debt in the levered firm which here in this case is7%

very neat presentation

@carajaclasses

7 жыл бұрын

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@carajaclasses

7 жыл бұрын

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@arnabnandi23

7 жыл бұрын

CA N Raja Natarajan Dear sir do we have to pay for the watsapp lectures?

@carajaclasses

7 жыл бұрын

Arnab Nandi No

It was a clear explanation of arbitrage process... Tq sir

@carajaclasses

4 жыл бұрын

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thanks sir

@carajaclasses

4 жыл бұрын

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Why should he borrow 10k to invest in N co? Can’t he invest the realised amount only in the N co?

@JayaLakshmi-hx8ee

3 ай бұрын

The risk shouldn’t change. In the levered firm he had a debt risk, so while going to the ul firm he should have the same debt risk

Nice explanation sir. But why we borrowed 10000rs?

@carajaclasses

5 жыл бұрын

I am glad that you liked my lectures. You can also Whatsapp me through this link for any queries - or simple text LECTURES to subscribe to our Whatsapp Lectures wa.me/917736022001 Do check FINANCIAL MANAGEMENT A COMPLETE STUDY carajaclasses.com/FMACS.html course for comprehensive lectures. Check out our other courses from website www.carajaclasses.com "Never stop learning, because life never stops teaching"

Nice

@carajaclasses

6 жыл бұрын

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@carajaclasses

6 жыл бұрын

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you did not explain why the guy would borrow debt. classic learning by heart people you are .

@carajaclasses

4 жыл бұрын

Shivam Mahajan basically to show he lands in surplus by having same level of stake in other firm as well.. borrowing exactly for the difference would not lead to any surplus but same level of Return

@shivammahajan9051

4 жыл бұрын

@@carajaclasses amazed with your quick response to my comment, However sir if shares are sold in the market . Then the equity in capital structure is simply replaced with a new shareholder( amount remaining same). And risk also automatically gets transferred to the new shareholder . So why do we have to assume that the person who is selling the shares has to borrow debt and be liable for the interest.

@Richdadpoordad-oh8gp

Ай бұрын

​@@shivammahajan9051you answered your own question this is an assumption to show the arbitrage process MM hypothised