Help me solve this problem...

[sakhi1984]

The problem goes like tis,

The capital structure of William Corporation limited consists of an ordinary share capital of
Rs.20 lakhs (shares of Rs.100 per value) and Rs.20 lakhs of 10% debentures. The unit sales
increased by 20% from 2,00,000 units to 2,40,000 units, the selling price is Rs.10 per unit,
variable cost amounts to Rs.6 per unit and fixed expenses amount to Rs.2,00,000. The
income tax rate is assumed to be 50%.
You are required to calculate the following:
a. The percentage increase in earnings per share.
b. The degree of financial leverage at 2,00,000 units and 2,40,000 units
c. The degree of operating leverage at 2,00,000 units and 2,40,000 units.

 

[abhishreshthaa]

The problem goes like tis,

The capital structure of William Corporation limited consists of an ordinary share capital of
Rs.20 lakhs (shares of Rs.100 per value) and Rs.20 lakhs of 10% debentures. The unit sales
increased by 20% from 2,00,000 units to 2,40,000 units, the selling price is Rs.10 per unit,
variable cost amounts to Rs.6 per unit and fixed expenses amount to Rs.2,00,000. The
income tax rate is assumed to be 50%.
You are required to calculate the following:
a. The percentage increase in earnings per share.
b. The degree of financial leverage at 2,00,000 units and 2,40,000 units
c. The degree of operating leverage at 2,00,000 units and 2,40,000 units.

hey shakshi, have you try to solve it up ??
what is the problem that you are facing ... please share your views about it....

:fishy:

 

[sangeetham]

I have got answer for this. Pl find the answer in the attachments.

 

[drram]

The capital structure of William corporation limited consist of an ordinary share capital of Rs 20 lakhs (shares of Rs 100 per value) and Rs 20 lakhs of 10% debentures. The unit sales increased by 20% from 2,00,000 units to 2,40,000 units, the selling price is Rs 10 per unit, variable cost amounts to Rs 6 per unit and fixed expense amount to Rs 2,00,000. The income tax rate is assumed to be 50%
You are required to calculate the following
A. The percentage increase in earnings per share
B. The degree of financial leverage at 2,00,000 units and 2,40,000 units
C. The degree of operating leverage at 2,00,000 units and 2,40,000 units

 

[crmsri]

Where did you find the solution ? Is it from Anna university Question paper ?

 

[sangeetham]

Where did you find the solution ? Is it from Anna university Question paper ?

Why do u bother about source. I am having the answer and posting to help u.
But i am sure the answer is 100% correct.

 

[cmmuxsuresh]

I have got answer for this. Pl find the answer in the attachments.

thanks for answering this question.i was also searching the answer.

 

[Abhimurugan]

even i was seraching for the solution of this problem,anyway thanks for the answer

 

[swasthik]

i too was searching for the answer. thanks for the answer

 

[swasthik]

what about the answer for 'c'. I downloaded the file but not getting the third answer

 

[cherancheran]

How to download the answer. Where is complete solution for this?