The ideal situation is to have high financial leverage and low operating leverage.

Related MCQs

• Dividend on preference share capital is ignored while calculating operating leverage.
• Operating leverage is not favourable when ………
• Financial leverage indicates disproportionate change in taxable income as a result of change in……
• The term trading on equity is generally used for …. .…financial leverage
• Composite leverage explains change in taxable income on account of change in sales
• An ideal current ratio must be------
• An ideal liquid ratio must be -----
• According to …. principle the ideal pattern of capital structure is one that tends to minimize the cost of financing.
• National Ltd. Has 12,000 equity shares of Rs.100 each. Sale price is equity share Rs.115 per share; flotation cost Rs.5 per share. Expected dividend growth rate is 5% and expected dividend at the end of the financial year is Rs.11 per share, What is the cost of equity shares of National Ltd?
• A critical assumption of NOI (Net operating income approach) to valuation is that…