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Can there be indifference point between debt and preference share capital
Answers (4)
Generally, Indifference point(idp) is one at which EPS of 1 option = EPS of another option.In Rarest of rare condions idp exists between finance cost options i.e pref.option and debt option. In such case EBIT= Interest+(pref.div/1-tax). And Interest = pref.div/1-tax.