Read the passage given below and answer question.

Khanna Ltd. is a company engaged in production and trade of "Phulkari" work of Punjab. Its products are in great demand overseas. The company plans to open one more unit for manufacturing Phulkari products. For this purpose, it requires additional investment of Rs 10 crores. It involves committing the finance on a long term basis. The Finance Manager of the company has suggested issue of debentures at an estimated cost of 8%. The EBIT of the company was Rs 6,00,000 and total capital invested was Rs. 1,00,00,000. The company can also opt for issuing equity shares as an alternative to debt financing. A judicious mix of both sources - Debt and Equity would increase the EPS. 

"A judicious mix of both sources - Debt and Equity would increase the EPS" __________ concept of Financial Management is conveyed by the above statement. 

Trading on Equity

The correct answer is Option 4- Trading on Equity.

The concept conveyed by the statement "A judicious mix of both sources - Debt and Equity would increase the EPS" pertains to Trading on Equity.

Trading on Equity is a financial technique where a company utilizes borrowed funds, such as debt, to amplify the return on investment for shareholders. By using debt in addition to equity financing, the company aims to increase its earnings per share (EPS), thereby enhancing the returns for its equity shareholders. This concept is closely related to the financial leverage strategy, which involves using fixed-cost funds to magnify the returns on equity.