Question

The financial manager of Best Foods Limited has 2 options to raise a capital of Rs 80

lakhs

Option 1 – Issue 8 lakhs equity shares of Rs 10 each

Option 2 – Issue 6 lakhs shares of Rs 10 each and Rs 20 lakhs through 10 %

debentures

The company is expecting a return of 20 % on the capital employed , The rate of tax

is 30 %

According to you which of the 2 options should be the financial manager choose and

why ?.State your workings clearly​

Answer 1

Answer:

With the issue of equity shares, preference shares and debentures. ... Which of the alternatives would you choose? Recommendation: ... (a) Issue of 50,000 shares at Rs. 10 per

Answer 2

Explanation:

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