PARTICULARS PLAN 1 PLAN 2 PLAN 3

Debt: 0 Debt: 50,000 16% Debt: 2,50,000 16%

Equity shares: non-convertible debentures at Rs 10 each
Existing – 10,00,000 debentures of Rs 100 Equity shares:
New - 2,00,000 each Existing - 10,00,000 New-
(50,00,000/10+15) at 10 Rs Equity shares: 50,000 (25,00,000/10+40)
each and 15 Rs premium Existing - 10,00,000 shares at Rs 10 each and 40
New - 0 Rs premium
EBIT 60,00,000 60,00,000 60,00,000
Less Interest - 8,00,000 4,00,000
EBT 60,00,000 52,00,000 56,00,000
Less: Tax at 50% 30,00,000 26,00,000 28,00,000
EAT or EAESH 30,00,000 26,00,000 28,00,000
EPS = EAT or 30,00,000/12,00,000 26,00,000/10,00,000 28,00,000/10,50,000
EASH//Number of = 2.5 = 2.6 = 2.7
Equity shares

Plan 3 is advised i.e., issuing 16% debentures of at Rs 10 each and equity shares of 50,000 at
10 Rs each at a premium of 40 Rs.