Question

Ashraf Ltd. Has the following capital structure:-
Equity (Tk. 100 per share) Tk. 10,00,000
12% Debt Tk. 5,00,000
The company wishes to raise Tk. 5,00,000 for expansion program. The following alternatives are available:-
100 equity;
50% equity and 50% debt @12%;
100% debt.
The expected EBIT is Tk. 20,00,000. The tax rate is 40%. Calculate the EPS and which one would you prefer? Calculate the indifference point of EBIT between (i) and (ii).

Answer 1

Answer:

आईसीसी आईसीसीइंची

Step-by-step explanation:

यूएन टी एच डी सी डीएम आरबी डीएम

Answer 2

Answer:

Ashraf Ltd. Has the following capital structure:-

Equity (Tk. 100 per share) Tk. 10,00,000

12% Debt Tk. 5,00,000

The company wishes to raise Tk. 5,00,000 for expansion program. The following alternatives are available:-

100 equity;

50% equity and 50% debt @12%;

100% debt.

The expected EBIT is Tk. 20,00,000. The tax rate is 40%. Calculate the EPS and which one would you prefer? Calculate the indifference point of EBIT between (i) and (ii).