CBSE 2026 · Region 5 · Set 3 · Q30

‘Ratan Ltd.’ and ‘Lara Ltd.’ are two companies with each having a capital employed of ₹ $\displaystyle 20,00$,000. ‘Ratan Ltd.’ had raised funds by issuing shares whereas ‘Lara Ltd.’s’ capital has $\displaystyle 60$% equity (in shares of ₹ $\displaystyle 100$ each) and $\displaystyle 40$% debt (comprising of $\displaystyle 8$% debentures). Both the

companies have a Return on Investment of $\displaystyle 10$% and the tax rate is %. State with reason which company will be able to give a better return to the shareholders. Show your calculations clearly.