Financial ManagementMCQQuestion 6280 of 222
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6. A company has net worth of ₹ 5,00,000. Its debt to equity ratio is 2. Interest on debt is 10%. The company earns an operating profit of ₹ 4,00,000. Tax rate is 30%. What will be the financial leverage of the company?

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option A — 1.11

All Options:

  • A1.11 ✓
  • B1.33
  • C1.43
  • D1.90 (2 Marks)

Detailed Solution & Explanation

Correct Answer: Option **A** Explanation: As per the official suggested answer, option **A** is correct. Hence, **Option A** is the correct answer.

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