Question
Fitwell CompanyisnowcapitalizedwithRs. 50,00,000 consistingof10,000ordinary shares of Rs. 500 each. Additional finance of Rs. 50,00,000 is required for a major expansion programme launched by the company.
Fitwell CompanyisnowcapitalizedwithRs. 50,00,000 consistingof10,000ordinary
shares of Rs. 500 each. Additional finance of Rs. 50,00,000 is required for a major expansion
programme launched by the company. Four possible financing plane are under consideration.
These are:
Entirely through additional share capital, issuing 10,000 shares of Rs.500 each.
Rs. 25 lakhs through ordinary shares and Rs. 25lakhs through 12% debt.
Entirely through 13% debt.
Rs. 25 lakhs through equity and Rs. 25lakhs through 10% preference shares of Rs.
500 each.
The company's EBIT presently is Rs.6lakhs. By virtue of theincrease in capitalization,
the EBIT is expected to double the present level
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Introduction to Operations Research
Authors: Frederick S. Hillier, Gerald J. Lieberman
10th edition
978-0072535105, 72535105, 978-1259162985
