Suppose that in 2019, Global launched an aggressive marketing campaign that boosted sales by 15%. However, their

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Suppose that in 2019, Global launched an aggressive marketing campaign that boosted sales by 15%. However, their operating margin fell from 5.57% to 4.50%. Suppose that they had no other income, interest expenses were unchanged, and taxes were the same percentage of pretax income as in 2018.
a. What was Global’s EBIT in 2019?
b. What was Global’s income in 2019?
c. If Global’s P/E ratio and number of shares outstanding remained unchanged, what was Global’s share price in 2019?

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Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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