Tute-8 Exercises - Leverages Q1 Calculate the operating and financial leverage for XYZ Ltd using the following

information: (Rs.la hs! "#$% 11&' "#% (&' )i*ed Cost +'' Calculate operating leverage and financial leverage under situations ,- # and C and financial plans 1- &- and ( respectivel. from the following information relating to the operation and capital structure of X- Y- Z Ltd. ,lso find out the com/inations of operating and financial leverage- which give the highest value and the least value. ,lso calculate the /rea 0even point in each case. $nstalled capacit. (units! ,ctual production and sales (units! 2elling price per unit (Rs! 4aria/le cost per unit (Rs! )i*ed Costs (Rs!: 2ituation , 2ituation # 2ituation C Capital 2tructure: "6uit. 7e/t Cost of de/t (for all plans! Q.( 1-&'' 1'' 13 1' 1-''' &-''' (-''' )inancial 5lan 1 & 3''' +3'' 3''' &3'' 1& per cent ( &3'' +3''

Q.&

"*cel Ltd. is considering three financing plans. %he e. information is as follows: a! %otal funds to /e raised- Rs. &-''-'''. /! )inancing 5lans 5lans , # C c! d! e! f! "6uit. 1'' 8 3'8 3'8 7e/t 999 3'8 999 5reference 999 999 3'8

Cost of de/t 1 8: cost of preference shares 1 8 %a* rate- (38 "6uit. shares of the face value of Rs. 1' each will /e issued at a premium of Rs. 1' per share "*pected "#$%- R2. 1'-'''

7etermine for each plan: i! "52 and financial /rea 0even point ii! $ndicate if an. of the plans dominate- and compute the "#$% range among the plans for indifference.