dear sir / madam
Pls help me to solve this problem.
1 L ltd needs to invest Rs 4000000. It is ascertain the cost of capital at different capital structure is as follows:
debt equity cost of debt % cost of equity%
10 90 6.00 12.00
20 80 6.50 12.50
25 75 7.00 12.50
40 60 7.00 13.00
50 50 7.25 13.50
60 40 7.50 14.00
75 25 8.00 15.00
a) yoare to suggest optimum debt equity mix base on weighted average cost of capital
b) The project has expected EBIT @ 25% and tax rate @ 35% for the debt equity mix supported by you. calculate EPS assuming capital is decided in uints of rs 100each
dear sir / madam
Pls help me to solve this problem.
1 L ltd needs to invest Rs 4000000. It is ascertain the cost of capital at different capital structure is as follows:
debt equity cost of debt % cost of equity%
10 90 6.00 12.00
20 80 6.50 12.50
25 75 7.00 12.50
40 60 7.00 13.00
50 50 7.25 13.50
60 40 7.50 14.00
75 25 8.00 15.00
a) yoare to suggest optimum debt equity mix base on weighted average cost of capital
b) The project has expected EBIT @ 25% and tax rate @ 35% for the debt equity mix supported by you. calculate EPS assuming capital is decided in uints of rs 100each
