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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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