The Capital structure of ABC Ltd, is as under: Equity share capital 100 Lacs 10% Debentures
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Question:
The Capital structure of ABC Ltd, is as under:
Equity share capital | ₹ 100 Lacs |
10% Debentures | ₹ 50 Lacs |
The sales for the year 2019 are 1.5 Lac units@ ₹ 40per unit
Also, the variable cost per unit is 20 % of sales revenue
₹ 12 Lacs is the fixed operating cost.
Assume Income tax rate as 40 %
Calculate Operating, Financial and Combined Leverage of the firm and interpret the result.
Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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