Modigiliani Miller Approach and Arbitrage - Financial Management - A Complete Study

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  • เผยแพร่เมื่อ 4 พ.ย. 2024

ความคิดเห็น • 88

  • @sumitbhandariji
    @sumitbhandariji 6 ปีที่แล้ว +29

    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
      @carajaclasses  6 ปีที่แล้ว +1

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  • @mojojojo5230
    @mojojojo5230 6 ปีที่แล้ว +38

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

    • @CAkeshav_lohia99
      @CAkeshav_lohia99 5 ปีที่แล้ว +2

      Mee too

    • @bairwakaran2553
      @bairwakaran2553 4 ปีที่แล้ว +2

      same here :(

    • @TARUNDEEP444
      @TARUNDEEP444 4 ปีที่แล้ว +1

      😂😂 same

    • @Harsh1t_singh
      @Harsh1t_singh 9 วันที่ผ่านมา +2

      arbitrage process is a whole different concept well kinda and you guys comments are 6 yrs 5 yrs 4 yrs old so i am asuming you all have figured it out more than me at this point of time

  • @camainuddindagli2858
    @camainuddindagli2858 6 ปีที่แล้ว +3

    This 8 minutes , clears my all doubt about the arbitrage

    • @carajaclasses
      @carajaclasses  5 ปีที่แล้ว +1

      I am glad that you liked my lectures.
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  • @rvgvtx
    @rvgvtx 4 ปีที่แล้ว +6

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

  • @pushpaksharma6488
    @pushpaksharma6488 5 ปีที่แล้ว +1

    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
      @carajaclasses  5 ปีที่แล้ว

      I am glad that you liked my lectures.
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  • @carajaclasses
    @carajaclasses  3 ปีที่แล้ว +1

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  • @muneebahmedsiddiqui973
    @muneebahmedsiddiqui973 6 ปีที่แล้ว

    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
      @carajaclasses  5 ปีที่แล้ว

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  • @aakahjaiswall3743
    @aakahjaiswall3743 6 ปีที่แล้ว +1

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

    • @carajaclasses
      @carajaclasses  6 ปีที่แล้ว

      aaka jaiswal I’m glad that you liked my lecture. If u r Interested in getting my Financial Video Lectures direct in your Whatsapp at regular intervals, Msg me YES through this Whatsapp link -
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  • @annumartin2345
    @annumartin2345 4 ปีที่แล้ว +1

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

    • @carajaclasses
      @carajaclasses  4 ปีที่แล้ว

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  • @tusharmehandiratta2761
    @tusharmehandiratta2761 7 ปีที่แล้ว +4

    how is investment in levered firm fetching 10%return?

  • @creativeperson5217
    @creativeperson5217 6 หลายเดือนก่อน +1

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

  • @sohailazmi8355
    @sohailazmi8355 5 ปีที่แล้ว +1

    Kindly make video on arbitrage gains where taxes are applicable

  • @viralshah8417
    @viralshah8417 6 ปีที่แล้ว +2

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

    • @carajaclasses
      @carajaclasses  6 ปีที่แล้ว

      "Thank you very much Kushal Shah If you wish to get my Financial Video lectures daily direct in your "WhatsApp", then watsapp me "TH-cam LECTURES" to +917736022001. Also do not forget to check out the complete course on this topic - FINANCIAL MANAGEMENT - A COMPLETE STUDY - www.udemy.com/financial-management-a-complete-study/?couponCode=YTBFMCS14 - All my courses are available in my web www.carajaclasses.com "

    • @viralshah8417
      @viralshah8417 6 ปีที่แล้ว

      Yes sir ....

  • @Pancake3399
    @Pancake3399 ปีที่แล้ว

    thanks for your nice explanation

  • @dharmarajbarik2108
    @dharmarajbarik2108 6 หลายเดือนก่อน +3

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

    • @Richdadpoordad-oh8gp
      @Richdadpoordad-oh8gp 4 หลายเดือนก่อน +1

      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

    • @keshviwadhwa1845
      @keshviwadhwa1845 หลายเดือนก่อน

      But can't it just borrow 20,000 - 11304, why 10,000?
      It would be great if you can explain this

    • @roshan3828
      @roshan3828 หลายเดือนก่อน

      ​@@keshviwadhwa1845 we r simply making equal debts in both cases.....in m ...he is a shareholder worth 11304.3₹ and also...as shareholders are owners they will have debt obligation...of 10% ie ...10000 ....so inorder to compare N co he should sell the shares and should have a same debt....to understand which option is best for his as an investor

  • @rupalsinha3042
    @rupalsinha3042 4 ปีที่แล้ว +1

    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
      @Richdadpoordad-oh8gp 4 หลายเดือนก่อน

      Remember that you have to pay more interest too

  • @jalajasuresh3471
    @jalajasuresh3471 8 หลายเดือนก่อน

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

  • @DineshSharma-eb1ch
    @DineshSharma-eb1ch 8 ปีที่แล้ว +1

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

  • @janvishankar9837
    @janvishankar9837 5 ปีที่แล้ว

    Best teacher for ever

    • @carajaclasses
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  • @biaat7759
    @biaat7759 7 ปีที่แล้ว

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

    • @carajaclasses
      @carajaclasses  7 ปีที่แล้ว

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    • @carajaclasses
      @carajaclasses  7 ปีที่แล้ว

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  • @Gamer-dx3kw
    @Gamer-dx3kw 11 หลายเดือนก่อน +1

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

    • @JayaLakshmi-hx8ee
      @JayaLakshmi-hx8ee 6 หลายเดือนก่อน +1

      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

  • @raghubm1443
    @raghubm1443 5 ปีที่แล้ว

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

  • @salbhonsle4144
    @salbhonsle4144 8 ปีที่แล้ว +3

    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
      @drprashantdash 8 ปีที่แล้ว +3

      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
      @carajaclasses  8 ปีที่แล้ว +2

      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
      @carajaclasses  8 ปีที่แล้ว +1

      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

  • @Ninja-gj1rk
    @Ninja-gj1rk 4 ปีที่แล้ว

    Great explanation

    • @carajaclasses
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  • @zeenathbanu3516
    @zeenathbanu3516 หลายเดือนก่อน

    7:05 how Rs. 21304 will be the exact 10% of 200,000. ??? It is 10.6% Earning proportion will be 2120. Deducting debt 700. Then 1420 will be the respective earning. It is Rs.120/- surplus. 9% surplus is neglected.

  • @ashishmatura7919
    @ashishmatura7919 5 ปีที่แล้ว

    Nice explanation sir. But why we borrowed 10000rs?

    • @carajaclasses
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  • @prickastley9608
    @prickastley9608 7 ปีที่แล้ว +2

    At least explain where you got the value of debt from

  • @Leo-tf3rw
    @Leo-tf3rw 7 ปีที่แล้ว

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

    • @chemseddinechemingui6121
      @chemseddinechemingui6121 6 ปีที่แล้ว

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

  • @suranjoychingakham8823
    @suranjoychingakham8823 7 ปีที่แล้ว

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

  • @Ghbvcghb
    @Ghbvcghb 6 ปีที่แล้ว

    Sir please solve the problem on Arbitrage process

  • @camainuddindagli2858
    @camainuddindagli2858 6 ปีที่แล้ว

    Impressed ✌🏻✌🏻

    • @carajaclasses
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  • @arnabnandi23
    @arnabnandi23 7 ปีที่แล้ว

    very neat presentation

    • @carajaclasses
      @carajaclasses  7 ปีที่แล้ว

      Hey,
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    • @carajaclasses
      @carajaclasses  7 ปีที่แล้ว +1

      Arnab.......... Join my Wats App Broadcast list and receive one
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    • @arnabnandi23
      @arnabnandi23 7 ปีที่แล้ว +1

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

    • @carajaclasses
      @carajaclasses  7 ปีที่แล้ว

      Arnab Nandi No

  • @yourfinancehub
    @yourfinancehub 7 ปีที่แล้ว

    Awsome sir... Thank you

    • @carajaclasses
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  • @babitapokhrel2055
    @babitapokhrel2055 4 ปีที่แล้ว

    thanks sir

    • @carajaclasses
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  • @saumyaprabhu2599
    @saumyaprabhu2599 5 ปีที่แล้ว

    Thankyou sir .

    • @carajaclasses
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  • @sadhanaarora5354
    @sadhanaarora5354 5 ปีที่แล้ว

    Thanks alot sir

    • @carajaclasses
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  • @muthuraju7409
    @muthuraju7409 8 ปีที่แล้ว

    Ty sir neat presentation :)

    • @carajaclasses
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  • @123456sssism
    @123456sssism 6 ปีที่แล้ว

    Good work sir

    • @carajaclasses
      @carajaclasses  6 ปีที่แล้ว

      "Thank you very much surendra kushwaha If you wish to get my Financial Video lectures daily direct in your "WhatsApp", then watsapp me "TH-cam LECTURES" to +917736022001. Also do not forget to check out the complete course on this topic - FINANCIAL MANAGEMENT - A COMPLETE STUDY - www.udemy.com/financial-management-a-complete-study/?couponCode=YTBFMCS14 - All my courses are available in my web www.carajaclasses.com "

  • @shivammahajan9051
    @shivammahajan9051 4 ปีที่แล้ว

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

    • @carajaclasses
      @carajaclasses  4 ปีที่แล้ว +1

      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
      @shivammahajan9051 4 ปีที่แล้ว

      @@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
      @Richdadpoordad-oh8gp 4 หลายเดือนก่อน

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

  • @aimeebrown7647
    @aimeebrown7647 7 ปีที่แล้ว

    Thank you

    • @carajaclasses
      @carajaclasses  7 ปีที่แล้ว +1

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  • @manishthakur9851
    @manishthakur9851 7 ปีที่แล้ว +3

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

    • @asiyarasool100
      @asiyarasool100 5 ปีที่แล้ว +2

      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%

  • @vinayparvatamath8192
    @vinayparvatamath8192 6 ปีที่แล้ว

    Tqq so much...

    • @carajaclasses
      @carajaclasses  6 ปีที่แล้ว

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  • @gdileep9395
    @gdileep9395 7 ปีที่แล้ว

    Nice

    • @carajaclasses
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