Calculate the market price of share corporate tax rate, Finance Basics

The Balance Sheet of International Trade Ltd. as on 31/3/2008 is as under:-                                 





Equity capital (Rs. 10 Each)




10% Long term debt




Retained Earnings




Current Liabilities












The total assets turnover ratio of the company is 3, its fixed operating cost is 1/6 of sales and variable operating cost is 50% of sales. The corporate tax rate is 35%.

You are require to:

(i)    Calculate the operating, financial and combined leverage.

(ii)   Calculate the market price of the share if the P/E multiple is 2.5

(iii)  Calculate the level of EBIT if the EPS is (a) Rs.15 (b) Rs.25.


Posted Date: 3/15/2013 2:26:49 AM | Location : United States

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