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A company's earning before interest and …

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A company's earning before interest and tax are 7 lakhs. it pays 10% interest on its debt. total investment of company is 50 lakhs. a. Advise the company whether it should include debt or equity to raise its capital. b. Name the concept related to this c. Will the company's decision to raise funds from Dept or equity will change if company EBIT become 3 lakhs

Posted by Karan Tolani 7 years, 1 month ago

CBSE > Class 12 > Business Studies

1 answers

Raghav Khandelwal 7 years, 1 month ago

ROI is 14% which is more than rate of interest so company can increase debts Yes decision will change in second case

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