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Celtra Limiteds present capital structure consists of 10 million shares of equity of Rs.10 each. It requires Rs.50 million of external financing. It is considering
Celtra Limiteds present capital structure consists of 10 million shares of equity of Rs.10 each. It requires Rs.50 million of external financing. It is considering two alternatives: Alternative 1: Issue of 2 million equity shares of Rs.10 par at Rs.15 each and 2 million preference shares of Rs.10 par, carrying a dividend rate of 10 percent. Alternative 2 : Issue of 1 million equity shares of Rs.10 par at Rs. 15 each and Rs.35 million of debentures carrying an interest rate of 12 percent The companys tax rate is 30 percent ? What is the EPS-PBIT indifference point
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