X Ltd. is considering the following two alternative financing plans: Plan – I (₹) Plan – II (₹) Equity shares of 10 each 4,00,000 4,00,000 12%…

CA Intermediate · Financial Management and Strategic Management · MTP · May 2026
X Ltd. is considering the following two alternative financing plans: Plan – I (₹) Plan – II (₹) Equity shares of 10 each 4,00,000 4,00,000 12% Debentures 2,00,000 - Preference Shares of 100 each - 2,00,000 6,00,000 6,00,000 The indifference point between the plans is 2,40,000. Corporate tax rate is 30%. What is the dividend on preference shares:
(A) ₹ 16,800
(B) ₹ 25,000
(C) ₹ 36,600
(D) ₹ 10,200

Suggested Answer and Working Notes:

Correct Answer: Option (A)

₹ 16,800

Topics: Part-A: Financial Management

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