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Z X Limited needs Rs 100000 for expensions of a branch. The extensions is excepted to yield an annual ebit of rs 160000. In closing a financial plan zx Limited has an objective of maximizing Earning per share. It is considering the possibility of issuing equity shares and raising debt of rupees 100000 or Rs 400000 or Rs 600000. The Current market price per share is rs 25 and if expected tto drop to rs 20 if the funds are borrowed excess of Rs 500000 . Fund can be borrowed at the rate indicate below. up to rs 100000 at 8% .over rs 100000 upto to rs 500000 at 12% and over rs 500000 at 18% . Assume a tax rate of 50 percent. Determined the EPS for the three financing alternative and suggest the scheme which would meet the objective of the management. |
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Answer» so long question so i am SORRY. U INTELLIGENT |
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