Question 1:- If the degree of total leverage is 5 and % change in sales is10, then % change in EPS will be?

a) 20

b) 50

c) 30

d) 40

Question 2:- Z Ltd. issues 1,00,000 14% debentures after 5 years at Rs.110 each. The commission payable to underwriters and brokers is 10% and the applicable tax rate is 45%. Calculate the cost of debt.

a) 12%

b) 11.70%

c) 13.50%

d) 14%