XYZ Company requires $ 1 , 0 0 0 , 0 0 0 for its proposed plan. The following financial alternatives are available: Plan A: 5 0 % Equity Capital ( Face Value $ 1 0 0 ) and 5 0 % Debenture ( interest rate 4 % ) Plan B: 2 5 % Equity Capital ( Face Value $ 1 0 0 ) , 2 5 % Debentures ( interest rate 4 % ) , and 5 0 % Preference Shares ( rate of dividend 6 % ) The rate of tax applicable to the company is 3 5 % . The company expects an EBIT of $ 4 , 0 0 0 , 0 0 0