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    Question

    EBIT = ₹5,00,000; Interest = ₹50,000; Preference

    dividend = ₹25,000; Tax = 30%. Compute Financial Leverage.
    A 1.11 Correct Answer Incorrect Answer
    B 1.14 Correct Answer Incorrect Answer
    C 1.10 Correct Answer Incorrect Answer
    D 1.20 Correct Answer Incorrect Answer
    E 1.15 Correct Answer Incorrect Answer

    Solution

    FL = EBIT / EBT = ₹5,00,000 / (₹5,00,000 – ₹50,000) ≈ 1.11 

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