Answer to Question #124578 in Finance for abdullah

Question

The Capitalstructure of ABC Ltd, is as under:
Equity share capital ₹100 Lacs
10% Debentures ₹50 Lacs

The sales for the year 2019are 1.5Lac units@ ₹40per unit

Also,the variable cost per unitis 20 % of sales revenue
₹12Lacs is the fixed operating cost.
AssumeIncome tax rate as 40 %
Calculate Operating, Financial and Combined Leverage of the firm and interpret the
result.

Answer 1

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