Rs.
| 4,000 Equity shares (Fully paid up) | 4,00,000 |
| 3,000 6% Debentures | 3,00,000 |
| 2,000 6% Preference Shares | 2,00,000 |
| Retained Earnings | 1,00,000 |
Earnings per equity share has been Rs. 10 during the past years and equity shares are being sold in the market at par. Assume corporate tax at 50 per cent and shareholder’s tax liability 25 per cent.
Question based on IIIBSM MBA Assignment Solution and other course
Solution:
Calculation of Different Source of Capital Cost of Equity Share Capital:
