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Capital Structure

Total questions: 5

Worksheet time: 4mins

Name
Class
Date
1.

The proportion of debt in the overall capital is also called __________

a)

Capital Structure

b)

Financial Leverage

c)

Trading On equity

d)

Cost of funds

2.

The increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest is called ______

a)

Financial leverage

b)

Debt Coverage

c)

Interest coverage

d)

Trading on Equity

3.

If return on investment is 10 % and rate of interest is 12% then which source of fund should be used for maximizing shareholder's wealth.

a)

Debt

b)

Equity

4.

The EBIT of ABC ltd is Rs 8,00,000. Rate of Interest is 10% and tax is 30%. Total capital employed is Debt 50,00,000. Equity- 30,00,000 ( price per share is RS 10). Calculate EPS

a)

21

b)

2.1

c)

1.03

d)

0.93

5.

Which component of capital structure determines the financial risk?

a)

Equity

b)

Debt

c)

Retained Earnings