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A company is contemplating to raise additional Fund of Rs . 2 0 , 0 0 , 0 0 0 for setting up a project.

A company is contemplating to raise additional Fund of Rs.20,00,000 for setting up a project. The company expects EBIT of Rs.8,00,000 from the project.Following alternating plants are available:i) To raise Rs.20,00,000 by way of equity share of Rs.10 each.ii) To raise Rs.10,00,000 by way of equity shares and Rs.10,00,000 by way of debt @ 10%.iii) To raise Rs.6,00,000 by way of equity and rest Rs.14,00,000 by way of preference shares @ 14%.iv) To raise:Rs.6,00,000 by equity sharesRs. 6,00,000 by debt @ 10%Rs.8,00,000 by 14% preference shares.The company is in 60% Tax bracket which option is best?

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