3 Set. (A) Company X is planning an expansion programme which will require Rs. 100 crores and can be funded through one of the three following options. [10 Marks] (a) Issue further equity share of Rs. 50 each at par. (b) Raise loans at 12% interest (c) Issue preference share at 14% Present paid up capital is Rs. 150 crores and average annual EBIT is Rs. 30 crores. Assume IT rate at 30%. After the expansion, EBIT is expected to be Rs. 40 crores per annum. Calculate EPS under the three financing options indicating the alternative giving the highest return to the equity shareholders