$a.$ Periuk $Sdn.Bhd.(PSB)$ reports sales $ofRM4,000,000,$ variable costs $ofRM500,000,$ fixed

operating costs $ofRM1,250,000,$ and interest expense $ofRM350,000.$ The corporation's

earnings before interest and tax $(EBIT)isRM2,250,000$ and its tax rate $is30\%.$

Based $on$ the above information, you are required $to$:

$i.$ Calculate the degree $of$ operating leverage for $PSB.$

$(3$ Marks$)$

$ii.$ Calculate the degree $of$ financial leverage for $PSB.$

$(3$ Marks$)$

iii. Compute the combined leverage for $PSB.$

$(1$ Mark$)$

$iv.If$ sales decrease $by10\%,$ what will $be$ the new level $ofPSB\text{'}s$ EPS $if$ the firm has

$500,000$ shares outstanding?

$(4$ Marks$)$

$b.$ Senduk Berhad will produce $94,000$ pairs $of$ boots next year. Variable costs are $35\%of$

sales, while fixed costs total $RM223,000.At$ what price must each pair $of$ boots $be$ sold

for Senduk Berhad $to$ obtain $an$ EBIT $ofRM139,150.$

$(4$ Marks$)$

$c.$ Kuali $Sdn.Bhd.(KSB)$ currently has $RM300,000$ debt outstanding carrying $an$ interest rate

$of4\%.$ Its EBIT are $RM100,000,$ and $itis$ a zero$-$growth company. The company's cost

$of$ equity $is10$ percent, and its tax rate $is30\%.$ The company has $10,000$ shares $of$

common stock outstanding. The dividend payout ratio $is100\%.$

$KSBis$ considering changing its capital structure $by$ issuing $RM400,000of$ new debt $ata$

before$-$tax cost $of5\%.$ The new funds would $be$ used $to$ replace the old debt and $to$

repurchase stock $at$ the existing price. $Itis$ estimated that the $in$