Answer to Question #121474 in Finance for Sheshadri

Question #121474
2. 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.
1
Expert's answer
2020-06-11T10:56:21-0400

Operating Leverage


Financial Leverage


Combined Leverage


greatest effect print Operating Leverage


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