Reference no: EM132579367
Carlisle Cha Corporation is considering an expansion of its chemical plant and requires an additional RM5 Million capital next year. Athe top management has two alternatives to obtain financing and they are:
Alternative 1
Issue 50% bond having an interest rate of 6% per annum and the balance will be financed in the form of common stock with a par value of RM10.
Alternative 2
Issue 8% preferred stock having a par value of RM100.
Below is the present Balance Sheet (partial) of Carlisle Cha Corp.
Liabilities & Net Worth RM
Current Liabilities 500,000
10% Debenture 2,000,000
8% Preferred Stock 3,000,000
Common stock @ par value RM5 10,000,000
15,000,000
Question 1: Calculate Detail As Possible