Question

32.
Daksh Ltd requires an investment of 760,00,000 to earn Earning Before Interest and
Tax (EBIT) of 8,00,000. In order to raise 60,00,000, there are two proposals.
Proposal A
= 6,00,000 equity shares of 10 each
Rate of tax = 20%
Proposal B
→ 4,00,000 equity shares of 10 each
10% 20,00,000 debentures
Rate of tax = 20%
Which proposal, if accepted, would ensure better earnings for the shareholders?
Decide on the basis of Earning Per Share (EPS).

Answer 1

Answer:

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