Page 51 - FINAL CFA SLIDES DECEMBER 2018 DAY 11
P. 51
Session Unit 11:
37. Measures of Leverage
Example 2: Beta Company financed with 50% equity and 50% debt, p.71: Continuing the previous
example, assume that Beta Company is financed with 50% equity and 50% debt. The interest rate on the
debt is 6%. Calculate Beta’s net income and return on equity if its EBIT increases or decreases by 10%.
Beta’s tax rate is 40%.
tanties
