if both the tax rate & interest rate is 10%. then from
where the company raise fund from debt or equity.
and which one is more suitable.
Answer Posted / anuj
Debt ang equity to raised is Rs 500
let income is Rs 100 ( When debt is raised )
intrest(-) 50
so, Tax (-) 5
PAT = 45
When equity is raised
intrest(-)0
Tax 50
PAT = 50 so,answer is equity option is better
| Is This Answer Correct ? | 4 Yes | 10 No |
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