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Financial Management CBF LTD propones to undertake and imestment at a cost of 100 Lakhs. The various sources from which priject the same can be

Financial Management CBF LTD propones to undertake and imestment at a cost of 100 Lakhs. The various sources from which priject the same can be financed and their relative Specific Costs are given below. Proposed Sources Amorent (& in Lakhs) Cast of Camprital (%) Equity 50 Retained earnings 10 20 ? 10 Preference Shores 10 10% Debentures 30 See note (a). 100 (a) Debentures of F 1000 each to be issued at a premicem of 10% redeemable after 5 years. Assuming a Corporate tax rate of 40% recommend the minimum acceptable rate of return for the propand project

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