Question
2. Gamma Corporation has issued 100,000 equity shares of Rs.10 each. It also has a debt of Rs.5,00,000 on which it has to pay
2. Gamma Corporation has issued 100,000 equity shares of Rs.10 each. It also has a debt of Rs.5,00,000 on which it has to pay 12% interest. The tax rate applicable to the company is 30%. The selling price per unit for the product of Gamma is Rs.50 and the variable cost per unit is Rs.30. The company incurs fixed costs of Rs.400,000 per annum. Compute Degree of Operating Leverage, Degree of Financial Leverage, Degree of Total Leverage and EPS.
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
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