Degree of financial leverage

Aarthy (student) (103 Points)

01 September 2012  

how to solve this problem?

The capital structure of a company consist of the following securities

10% preference share capital   Rs1,00,000

Equity share capital (Rs.10 shares)   1,00,000

  The amount of operating profit is Rs.60,000.The company is in 50% tax bracket.

you are required to calculate the financial leverage of the company.

And also how to calculate the preference dividend after grossing up???