Q. No. 4 A company needs Rs. 18.00.000 for business expansion, which would yicld an annual Earnings Bofore Interest and Tax (EBIT) of Rs. 300,000. The company has the objective of maximizing the Earning Per Share (EPS). It is considering the possibility of issuing equity shares plus raising a debt of Rs. 300,000, Rs. 900.000 or Rs. 15.00.000. The current market price per share is Rs. 50 which is expected to drop to Rs. 30 per share if the market borrowings were to exceed to 1,000,000 Cost of borrowings is indicated as under: 1. Up to Rs. 300,000 2. Between Rs. 300.001 and Rs. 850.000 3. Between Rs. 850,001 and Rs. 15,00,000 9% p.a 12% p.a 14% pa Assuming tax rate to be 25% work out EPS in each case and suggest the best financial option