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We have outstanding 100000 equity of 10 each. For expansion
of business we need Rs.500000. which of the following option
will be beneficial for equity shareholders ? If net profit
before interest & tax is 300000 &tax rate is 40%.(1)-50000
equity sh of Rs 10 each,(2)-10% Pref Sh.. Rs 100 each,(3)-
5000 10% debentures.??????????

Answer Posted / jagdish

(2)
Profit-300000
less-inter-2000
EBIT-280000
LESS-112000
PAT-168000

(1)PROFIT-300000
TAX-120000
PAT-180000

Is This Answer Correct ?    3 Yes 1 No



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