(^312) Financial Management
(ii)EBIT = Rs 1,00,000 (5 per cent return)
EBIT 1,00,000 1,00,000 1,00,000 1,00,000
Less interest - 25,000 60,000 -
EBT 1,00,000 75,000 40,000 35,000
Less taxes 35,000 26,250 14,000 35,000
EAT 65,000 48,750 26,000 65,000
Less preference dividend - - - 25,000
EAT for equity holders 65,000 48,750 26,000 40,000
EPS 3.25 3.25 2.6 2.67
(iii) EBIT = Rs 1,30,000 (6.5 per cent return)
EBIT 1,30,000 1,30,000 1,30,000 1,30,000
Less interest - 25,000 60,000 -
EBT 1,30,000 1,05,000 70,000 1,30,000
Less taxes 45,500 36,750 24,500 45,500
EAT 84,500 68,250 45,500 84,500
Less preference dividend - - - 25,000
EAT for equity holders 84,500 68,250 45,500 59,500
EPS 4.22 4.55 4.55 3.97
(iv)EBIT a Rs 1,60,000 (8 per cent return)
EBIT 1,60,000 1,60,000 1,60,000 1,60,000
Less interest - 25,000 60,000 -
EBT 1,60,000 1,35,000 1,00,000 1,60,000
Less taxes 56,000 47,250 35,000 56,000
EAT 1,04,000 87,750 65,000 1,04,000
Less preference dividend - - - 25,000
EAT for equity holders 1,04,000 87,750 65,000 79,000
EPS 5.2 5.8 6.5 5.3
(v) EBIT = Rs 2,00,000 (10 per cent return)
EBIT 2,00,000 2,00,000 2,00,000 2,00,000
Less interest - 25,000 60,000 -
EBT 2,00,000 1,75,000 1,40,000 2,00,000
Less taxes 70,000 61,250 49,000 70,000
EAT 1,30,000 1,13,750 91,000 1,30,000
Less preference dividend - - - 25,000
EAT for equity holders 1,30,000 1,13,750 91,000 1,05,000
EPS 6.5 7.6 9.1 7
frankie
(Frankie)
#1