Determine eps and dfl, Finance Basics

Assignment Help:

The operating profit (EBIT) of ABC Ltd is Rs. 1,60,000. Its capital structure consists of the following:

10% Debentures Rs. 500000
12% Preference Shares 100000
Equity Shares (Rs.100 each) 400000

The company is in the tax bracket of 35%. The withholding tax on preference dividend is 10%.
(i) Determine EPS
(ii) Determine the DFL
(iii) Determine the % change in EPS if EBIT increase by 30%.
(iv) Assuming DOL 2, determine the DCL.


Related Discussions:- Determine eps and dfl

Determine the required rate of return on the security, Elephant Company com...

Elephant Company common stock has a beta of 1.2. The risk-free rate is 6% and the expected market rate of return is 12%. Determine the required rate of return on the security.

Agency relationship between government and the shareholders, Agency Relatio...

Agency Relationship between Government and the Shareholders Shareholders and via extension, the company they own operate within the environment requiring the charter or licens

Roe - return on equity, ROE - Return on Equity The average of the...

ROE - Return on Equity The average of the industry ROE was 21.38% for 2004, 24.99% for 2005, and 23.56% for 2006. The chart showed that after the acquisition of IBM PC di

Product mix, what are the qualitative factors to be considered when decidin...

what are the qualitative factors to be considered when deciding on product mix

Present annuity & future annuity, John has just retired & she is running ou...

John has just retired & she is running out of cash. Her finanical planner advises her to do reverse mortage to improve her standard of living. The current market value of her self

Calculate the firms wacc, The Genesis operations management team, nearing c...

The Genesis operations management team, nearing completion of its agreement with Sensible Essentials, was asked by senior management to present a capital plan for the operating exp

Eye field - vertebrate eye, Eye Field - Vertebrate Eye The development...

Eye Field - Vertebrate Eye The development of eyes starts with evagination of the lateral wall of the forebrain. one on each side, which make the optic vesicles. By vital dye

Compute the risk premium for the stock, Compute the risk premium for the st...

Compute the risk premium for the stock of Omega Tools if the risk free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of .8.    Ome

Capital asset pricing model (capm), Capital Asset Pricing Model (CAPM) ...

Capital Asset Pricing Model (CAPM) CAPM is a methods that is used to establish the required rate of return of an investment provided a particular level of risk.  According to

Agency theory, Agency Theory An agency relationship arises whether on...

Agency Theory An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd