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7. Show the effect of financial levcrage on ERS by considering the following two financial plans of EBIT : (a) Rs. 2,00.000 and (b) Rs.

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7. Show the effect of financial levcrage on ERS by considering the following two financial plans of EBIT : (a) Rs. 2,00.000 and (b) Rs. 1.00,000. Total funds required : Rs. 10,00.000 Plan A : 100% Equity Shares of Rs. 10 each Plan B : 50% Equity Shares of Rs. 10 and 50%15% debts Tax Rate 40%

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