Rise Ltd., a listed company having registered office in Delhi, has proposed two financial plans. Details of the same are given below: Sources of funds Plan - 1 Plan - 2 Equity shares of ₹100 each ₹22,50,000 ₹45,00,000 12

Based on the indifference point calculated in 1(a)(ii) as ₹17,16,154 : If EBIT is less than ₹17,16,154: Plan-2 is better because it has lower fixed financial charges (only debenture interest, no preference dividend), leading to a higher EPS at lower EBIT levels. If EBIT is greater than ₹17,16,154: Plan-1 is better because its higher financial leverage (due to preference shares and debentures) amplifies EPS more significantly at higher EBIT levels. If EBIT is exactly ₹17,16,154: Both plans will yield the same EPS.