Coral Ltd. is an agri-business company that operates in two segments - animal feed and crop protection. The company's Research and Development…

Coral Ltd. is an agri-business company that operates in two segments - animal feed and crop protection. The company's Research and Development Department has been instrumental in its growth and success. The existing capital structure of Coral Ltd. is as follows: Particulars Amount (₹) Equity Shares (10,00,000 shares of 10 each) 1,00,00,000 15% Debentures (30,000 Debentures of 100 each) 30,00,000 Coral Ltd. desires to expand its horizon in breeding high-yielding and disease-resistant seeds for increasing agricultural productivity. The company requires additional funds amounting 100 lakh to finance its business expansion plan. The expected earnings before interest and taxes after this additional investment will be 76 lakh. The applicable corporate income tax rate is 30%. The company has two alternatives for raising this additional fund: Particulars Plan-I Plan - II Equity shares of 10 each to be issued at a premium of 15 per share 30% 10% 13% Debentures of 100 each to be issued at par 70% 50% 7.15% Preference Shares of 10 each to be issued at par - 40%