A company needs ₹ 31,25,000 for the construction of new Cold Storage plant. The following two plans are feasible : (i) Company may issue 3,12,500 equity shares at ₹ 10 per share. (ii) Company may issue 1,56,250 ordinary
CS Executive · Financial and Strategic Management · PYQS · December 2024
A company needs ₹ 31,25,000 for the construction of new Cold Storage plant. The following two plans are feasible : (i) Company may issue 3,12,500 equity shares at ₹ 10 per share. (ii) Company may issue 1,56,250 ordinary equity shares at ₹ 10 per share and 15,625 debentures of ₹ 100 denomination bearing 8% rate of interest. Corporate income-tax rate is 30%. The indifference point will be (₹):
Answer & Explanation:
Correct Answer: Option (B)
Official answer key: (B).
Topics: Financial Management
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