A company is considering two financing plans: Plan A (Equity only): 40,000 equity sharesPlan B (Debt + Equity): Debt of 12,00,000 at 10% interest…

CA Intermediate · Financial Management and Strategic Management · MTP · January 2026
A company is considering two financing plans: Plan A (Equity only): 40,000 equity sharesPlan B (Debt + Equity): Debt of 12,00,000 at 10% interest and 25,000 equity shares Tax rate = 30%. The EBIT indifference point between Plan A and Plan B is:
(A) ₹ 4,00,000
(B) ₹ 4,80,000
(C) ₹ 6,00,000
(D) ₹ 3,20,000

Suggested Answer and Working Notes:

Correct Answer: Option (D)

₹ 3,20,000

Topics: Part-A: Financial Management

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