Dividend on preference share capital is ignored while calculating operating leverage.

Related MCQs

• 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?
• The ideal situation is to have high financial leverage and low operating leverage.
• ABC Ltd. acquires hundred percent of preference share capital of PQR Ltd. It would result in
• Operating leverage is not favourable when ………
• The policy on quantum of dividend to be distributed as dividend is termed as ……
• ….principle says that issue of debt and preference shares do not affect the interest of equity share holders.
• 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
• …… increases the number of shares without actually increasing the paid - up value of the share capital.