Interest on borrowed funds

Reference no: EM131091401

Evan Soft Ltd. has assets of Rs. 2,80,000 which have been financed with Rs. 64,000 of debts and Rs. 1,10,000 of equity and a general reserve of Rs. 18,000. The firm's total profits after interest and taxes for the year ended 31st March 2015 were Rs. 25,700. It pays 13% interest on borrowed funds and is in the 60% tax bracket. it has 1,000 equity shares of Rs. 100 each selling at a market price of Rs. 125 per share. The firm pays 60% of its earning as dividend. The earning per share is Rs. ______________. Answer Choices 31.2 22.44 12.78 25.7 The cost of debt capital is ________________

Reference no: EM131091401

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