EBIT ₹10 lakh; Plan A: 100% equity (1 lakh shares); Plan B: ₹50 lakh debt @ 10% + 50,000 equity shares. Tax 50%. Under which plan is EPS higher at EBIT = ₹10 lakh?

1. Plan A: PAT = 10 × (1−0.5) = 5 lakh; EPS = 5,00,000/1,00,000 = ₹5. 2. Plan B: Interest = 5 lakh; PBT = 5 lakh; PAT = 2.5 lakh; EPS = 2,50,000/50,000 = ₹5. 3. Equal — but option B is the answer per the original computation; actually they tie at this EBIT (Indifference Point demo). _Source: ICAI BoS CA Inter Paper 6A, Ch 5 "Financing Decisions — Capital Structure", §3 — EBIT-EPS Indifference_