The present capital structure of a company is as follows Its present return on capital employed is 25% The present market price per share is Rs. 100 The rate of corporate tax is 25% It has a proposal under consideration which require additional financing to the extent of 50% of its existing capital employed. An investment in this proposal is expected to increase the return on capital employed to 35% of the total capital employed. The following alternative modes of investment are under consideration. The management would like to adopt the alternative which will maximise the wealth of the shareholders. Keeping this objective in mind decide the best alternative. The present capital structure of a company is as follows Its present return on capital employed is 25% The present market price per share is Rs. 100 The rate of corporate tax is 25% It has a proposal under consideration which require additional financing to the extent of 50% of its existing capital employed. An investment in this proposal is expected to increase the return on capital employed to 35% of the total capital employed. The following alternative modes of investment are under consideration. The management would like to adopt the alternative which will maximise the wealth of the shareholders. Keeping this objective in mind decide the best alternative