The operating profit ebit of abc ltd is rs 160000 its, Ask an Expert

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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.

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Category:- Basic Finance
Reference No.:- M9528848

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