Solve 15 q

ebit=10lacs , debt=10lacs[total-equity] tax rate=40% , facevalue=10
EBIT=1000000
(INTEREST)=1LAC(10% OF debt)
=9lacs
-tax(360000)
=540000
so,EAT=540000
NO. of shares=400000
EPS=540000/400000
       =1.35
ROI=EBIT/TOTAL CAPITAL X100
       1000000/5000000X100
        =20%
so,interest is 10%
it is  fesible to raise debt as  roi>interest rate
hence company has taken right decision