Determine the accurate valuation of BDM Ltd. as calculated by the registered valuer of DPL, and provide an ANALYSIS based on the revised valuation.

Step 1: Calculate Correct Weights Let E = Market value of equity and D = Market value of debt = Book value of equityTotal market value (V) = E + D = 3 B + B = 4 B (where B is book value of equity)Weight of equity (W e ) = E / V = 3 B / 4B = 0.75Weight of debt (W d ) = D / V = B / 4B = 0.25 Step 2: Calculate Correct WACC WACC = W e × K e + W d × K d = 0.75 × 12% + 0.25 × 6% = 10.5% Step 3: Calculate Correct Firm Value Firm value (V 0 ) = FCFF 1 / (WACC - g) = 2 crores / (0.105 - 0.05) = 36.36 crores Conclusion The correct valuation of BDM Ltd. is 36.36 crores. This figure is notably lower than the initial valuation of 50crores provided by the analyst, who incorrectly relied on book values rather than market values in the Weighted Average Cost of Capital (WACC) calculation. This discrepancy underscores the critical importance of using accurate market value weights when determining the value of a company, especially in strategic acquisitions like that of BDM Ltd. by DPL. The revised valuation provides a more realistic assessment, aligning with DPL's commitment to prudent financial management and informed decision-making during the acquisition process.