Question: Please help me asap text answer please Problem No. 10] The following summarizes the percentage changes in operating income, percentage changes in revenues, and betas

Please help me asap text answer please

Please help me asap text answer please Problem No. 10] The following

Problem No. 10] The following summarizes the percentage changes in operating income, percentage changes in revenues, and betas for four pharmaceutical firms. Firm Change in revenue Change in operating income Beta POR Lid. 27% 25% 1.00 RST Ltd. 25% 32% 1.15 TUV Ltd. 23% 36% 1.30 WXY Ltd. 21% 40% 1.40 Required: (0) Calculate the degree of operating leverage for each of these firms. Comment also. (ii) Use the operating leverage to explain why these firms have different beta. Ans.: Operating Leverage % change in EBIT (Operating income) % change in Sales POR Ltd. = 25% 27% = 0.93 RST Ltd. = 32% 25% = 1.28 TUV Ltd. = 36% 23% = 1.57 WXY Ltd. 40% 21% = 1.91

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