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Exercise 2 A Company has the following capital structure. Equity share capital 10% Prof. share capital 8% Debentures Rs. 1,00,000 1,00,000 1,25,000 The present EBIT

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Exercise 2 A Company has the following capital structure. Equity share capital 10% Prof. share capital 8% Debentures Rs. 1,00,000 1,00,000 1,25,000 The present EBIT is Rs. 50,000. Calculate the financial leverage assuring that the company is in 50% tax bracket

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