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Extracted text: В. Two companies X and Y belong to the equivalent risk group. The two companies are identical in every respect except that company Y is levered, while X is unlevered. The outstanding amount of debt of the levered company is Rs. 6,00,000 in 10% debentures. The other information for the two companies is as follows: Particulars Net operating income -Interest Earnings to Equity Share Holders Y 1,50,000 60,000 90,000 1,50,000 1,50,000 Equity capitalization rate Market value of equity Market value of debt Total value of the firm, V Overall capitalization rate (Ko = EBITV) Debt-Equity Ratio 0.20 4,50,000 6,00,000 10,50,000 14.3% 1.33 0.15 10,00,000 10,00,000 15% An investor owns 5% equity shares of company Y. Show the process and the amount by which he could reduce his outlay through use of the arbitrage process. Is there any limit to the process?