Given the Earnings before interest and taxes(EBIT) is Rs 30000 Interest payment is Rs 10000 Dividend on the preference shares Rs9000 Taxes being 50% of the profit before taxes(PBT). Number of outstanding equity shares 10000 What would be the earning per share(EPS) and degree of financial leverage (DFL), What would be the change in EPS, and DFL, if the EBIT increases to Rs50000 and Rs80000 Note- you have to calculate three EPS and three calculations for DFL
Given the Earnings before interest and taxes(EBIT) is Rs 30000 Interest payment is Rs 10000 Dividend on the preference shares Rs9000 Taxes being 50% of the profit before taxes(PBT). Number of outstanding equity shares 10000 What would be the earning per share(EPS) and degree of financial leverage (DFL), What would be the change in EPS, and DFL, if the EBIT increases to Rs50000 and Rs80000 Note- you have to calculate three EPS and three calculations for DFL
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Given the Earnings before interest and taxes(EBIT) is Rs 30000
Interest payment is Rs 10000
Dividend on the
Taxes being 50% of the profit before taxes(PBT).
Number of outstanding equity shares 10000
What would be the earning per share(EPS) and degree of financial leverage (DFL), What would be the change in EPS, and DFL, if the EBIT increases to Rs50000 and Rs80000
Note- you have to calculate three EPS and three calculations for DFL
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