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Compute max EPS among all the plan

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Question - A Company is considering three financing plans: 20% Equity and 80% Debt; 50% equity and 50% debt; 70% equity and 30% debt. Total funds needed are Rs. 40 lakhs. EBIT is expected to be Rs. 850000. Shares can be sold at the rate of Rs. 10 per share. Funds can be borrowed as follows: up to and including Rs. 2000000 at 15%; and above that at the rate of 18%. Compute max EPS among all the plan. Assume a tax rate of 30%.

Reference no: EM132543516

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