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If EBIT is INR. 15,00,000, interest is 2,50,000, corporate tax is 40%, degree of financial leverage isa.1.11b.1.2c.1.31d.1.41

Question

If EBIT is INR. 15,00,000, interest is 2,50,000, corporate tax is 40%, degree of financial leverage isa.1.11b.1.2c.1.31d.1.41

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Solution

The question seems to be asking for the calculation of the degree of financial leverage. However, the degree of financial leverage is not calculated using EBIT, interest, or corporate tax. Instead, it is calculated using the formula:

Degree of Financial Leverage = % Change in EPS / % Change in EBIT

EPS stands for Earnings Per Share and EBIT stands for Earnings Before Interest and Taxes.

Without information on the changes in EPS or EBIT, it's not possible to calculate the degree of financial leverage.

The options provided (a.1.11, b.1.2, c.1.31, d.1.41) seem to be potential answers to a different question, perhaps one asking for the calculation of the degree of financial leverage given certain changes in EPS and EBIT.

Please provide the correct information to calculate the degree of financial leverage.

This problem has been solved

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