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4: Mayura Inc.'s capital structure is comprised of 100,000 common shares and $700,000 of 7% interest bearing debt. The tax rate is 30%. An additional
4: Mayura Inc.'s capital structure is comprised of 100,000 common shares and $700,000 of 7% interest bearing debt. The tax rate is 30%. An additional $200,000 has to be raised and the following alternatives are available: - Issue additional shares at $16 per share, net of issuance cost; therefore, 12,500 shares would be issued - Issue debt at 7% per annum; therefore annual interest payments are $14,000 pre-tax Compute EPS as a function of EBIT for both alternatives and
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