. Financing alternatives for obtaining the requisite amount of Rs.20 Crores are under consideration.
Alternative I: Equity shares can be issued at Rs.10 par with a premium of Rs.40 each. Share issue expenses as also under pricing of the issue in comparison to ruling market price result in net proceeds of Rs.40 for every new share issued.
A Itemative //'Company can borrow the requisite amount at 15% rate of interest per year.
The company decided to borrow Rs.10 Crore at 15% rate of interest per year and the balance amount obtained by share issue at par terms indicated in the first alternative.
How many equity shares are required to be issued for availing finance of Rs.20 Crore?
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