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QUESTION 32 CID Enterprise's EPS increased from $2.00 last year to $4.00 this year with a 20 % increase in sales. I...
Prestige has revenue of $50 million with 20% variable costs. It has $20 million of bonds financed at 6% and has fixed costs of $30 million. What is Prestige's degree of total leverage? a. 1.1. b. 2.7. c. 4.0. d. 4.5. CJD Enterprise's EPS increased from $2.00 last year to $4.00 this year with a 20% increase in sales. If CJD's degree of operating leverage is 3.0, then what is CJD's degree of financial leverage? a. 1.5. b. 1.67 c....
Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales$5,100,000Variable costs (50% of sales)2,550,000Fixed costs1,810,000Earnings before interest and taxes (EBIT)$740,000Interest (10% cost)220,000Earnings before taxes (EBT)$520,000Tax (35%)182,000Earnings after taxes (EAT)$338,000Shares of common stock210,000Earnings per share$1.61 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $2.1 million in additional financing. His investment banker has...