Calculate business and financial risk of firm

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Khalique enterprise is a renown organization with almost one million shares outstanding. The company performed very well till last year, but this year; due to management shifts, investors are losing their interest in organization. Currently company's common stock (C.S) is priced at Rs. 10/share and preferred stock (P.S) is priced at Rs. 7.5/ share, which were originally issued at Rs. 7.5 and Rs. 4 per share respectively. C.S to P.S ratio is 40% and debt to capital ratio is 65%. Currently company has earned net profit of 1.3 millions after paying 30% of operating profit in taxes and Rs. 915,307 as interest payment. If company's payout ratio is 60% (i.e. 60% of firms net profit will be paid as dividend to share holders)

Problem 1: Calculate Business and Financial risk of firm.

Problem 2: Find EPS and DPS of firm

Reference no: EM132569711

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