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