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Finance: Solved Questions on Fixed and Variable Costs, DFL, EPS, Debt Equity Ratio, Stock Split and Dividend Policy

Calculating breakeven point and degree of financial leverage for different scenarios

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Added on  2023-06-09

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This article provides solutions to finance questions related to fixed and variable costs, DFL, EPS, debt equity ratio, stock split and dividend policy. It also discusses the impact of legal constraints on stock split and dividend policy.

Finance: Solved Questions on Fixed and Variable Costs, DFL, EPS, Debt Equity Ratio, Stock Split and Dividend Policy

Calculating breakeven point and degree of financial leverage for different scenarios

   Added on 2023-06-09

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Running head: FINANCE 0
Finance
Finance: Solved Questions on Fixed and Variable Costs, DFL, EPS, Debt Equity Ratio, Stock Split and Dividend Policy_1
FINANCE 1
Question 1
Question 2
EBIT 20400
DFL = EBIT / EBIT-I-
PD*(1-T)
Interest expense 2910
Preferred Dividends 4050 DFL= 17490
6532
Tax @
38% 38% 10958
DFL= 1.86
Fixed operating
Costs 12700 21.68
Variable operating costs 6.94
Selling price 28.62
BEP= Fixed Cost/ (Selling price -Variable cost)
BEP 1829.9712 units
Finance: Solved Questions on Fixed and Variable Costs, DFL, EPS, Debt Equity Ratio, Stock Split and Dividend Policy_2
FINANCE 2
Question 3
EBIT 19400
DFL = EBIT / EBIT-I-
PD*(1-T)
Interest expense 2940
Preferred Dividends 4100 DFL= 16460
6613
Tax @
38% 38% 9847
DFL= 2.07
Finance: Solved Questions on Fixed and Variable Costs, DFL, EPS, Debt Equity Ratio, Stock Split and Dividend Policy_3

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