A project requires a capital outlay of ₹400 Lakh. The required amount can be raised either by issuing equity shares of the face value of ₹400 Lakh, or by issuing equity shares to the extent of ₹200 Lakh and acquiring 15%
CS Executive · Financial and Strategic Management · PYQS · June 2022
A project requires a capital outlay of ₹400 Lakh. The required amount can be raised either by issuing equity shares of the face value of ₹400 Lakh, or by issuing equity shares to the extent of ₹200 Lakh and acquiring 15% debt of ₹200 Lakh. Assuming a tax rate of 40%, the indifference point of both the financing options will be :
Answer & Explanation:
Correct Answer: Option (C)
Official answer key: (C).
Topics: Financial Management
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