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A company needs Rs. 10,00,000/- for modernization. The following 3 plans are available - a) Issue 100,000 equity shares of Rs.10 per share b)
A company needs Rs. 10,00,000/- for modernization. The following 3 plans are available - a) Issue 100,000 equity shares of Rs.10 per share b) Issue of 50,000 equity shares of 10 per share & 5,000 debentures of Rs. 100 each at 14% rate of interest. C) Issue of 50,000 equity shares & balance through 10% preference shares. If the company's EBIT are Rs. 50,000/-, Rs. 100,000/-, Rs. 120,000/- and Rs. 160,000/-. What will be the EPS under each of the 3 financial plans. Assume Income tax rate 25%.(20)
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