The document discusses capital structure decisions and financial management concepts like operating leverage, financial leverage, and theories of capital structure. It provides examples and solutions to calculate leverage, break-even point, return on equity, debt service coverage ratio, and optimal capital structure for different companies based on their capital structure and financial details.
Capital Structure Decisions In Financial Management 7 November
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5. A Company produces and sells 10,000 shirts. The selling price per shirt is Rs. 500. Variable cost is Rs. 200 per shirt and fixed operating cost is Rs. 25,00,000. (a) Calculate operating leverage. (b) If sales are up by 10%, then what is the impact on EBIT?
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15. Find the combined leverage 20,000 Total 20,000 5,000 Debt (20%) 10,000 15,000 Equity 10,000 B A Financial Plan 20000 Under Situation-il 15000 Under Situation I Fixed Cost: 15 per unit Variable Cost 30 per unit Selling Price 75% Actual Production and Sales 4000 units installed Capacity
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27. Sarika Consultants & Pankaj Baid Consultants are two firms. Having NOI of $ 15 lakhs each.Pankaj Baid consultants have taken ECB of $7 lakhs @11%. Tax rate = 33% Equity of Sarika consultants $ 13 lakhs and that of Pankaj Consultants is $6 lakhs