Question: 14. The following data relates to a new fixed-base operator (FBO) at a terminal in Toronto: Capital structure Debt $4,500,000 Common stock, $10 per share
14. The following data relates to a new fixed-base operator (FBO) at a terminal in Toronto: Capital structure Debt $4,500,000 Common stock, $10 per share 1,500,000 Common shares 3,000,000 150,000 Operational activities Sales (300,000 units at S10 each) $3,000,000 Less: Variable costs 1,800,000 Variable costs 400,000 Earnings before interest and taxes (EBIT) $1,000,000 a. What is the degree of operation leverage (DOL)? b. What is the degree of financial leverage (DFL)? c. If sales double, by what percent will earnings per share (EPS) increase
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
