a company has currently an all equity capital structure consisting of 15000 equi

a company has currently an all equity capital structure consisting of 15000 equity shares on rs100 each. the management is planning to raise another rs 25 lakh to financing a major programme of expansion and he is considering 3 alternative methods of financing: 1) to issue 25000 equity share on rs 100 each. 2) to issue 25000 8% debentures on rs 100 each. 3) to issue 25000 8% preference share on rs 100 each. the company’s expended ebit is rs 8 lakh . assuming a corporate tax rate of 5% , determine eps in each alternative and comment which alternative is best.
Requirements: 500

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