12. A company has the choice of issuing 10% debentures or `100 equity shares to raise

`20 lakh to meet its long-term investment requirements. Its current capital structure consists of 20,000 ordinary shares of `100 each, 8% debentures of `10,00,000 and 12%

preference shares of `10,00,000. Determine the level of EBIT at which EPS would be the same, whether the new funds are acquired by issuing ordinary shares or by issuing 10%

debentures. Tax rate is assumed to be 50% (ignore dividend distribution tax).

Also, construct EBIT-EPS chart assuming various levels of EBIT. [C.U. B.Com. (H), 2014]