4 "Var/Fixed 12% increase % change 4,000,000 Sales Variable Cost (60%) V Fixed Cost F 1,000,000 Operating Income (EBIT) Interest F 250,000 EBT Taxes (34%) V Earnings After Taxes Preferred Dividends F 150,000 Earnings available to common stockholders Earnings per share assuming 50,000 shares Calculate The Degree of Financial Leverage 4.88x 4.89x
4 "Var/Fixed 12% increase % change 4,000,000 Sales Variable Cost (60%) V Fixed Cost F 1,000,000 Operating Income (EBIT) Interest F 250,000 EBT Taxes (34%) V Earnings After Taxes Preferred Dividends F 150,000 Earnings available to common stockholders Earnings per share assuming 50,000 shares Calculate The Degree of Financial Leverage 4.88x 4.89x
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:4
"Var/Fixed
12% increase
% change
4,000,000
Sales
Variable Cost (60%)
V
Fixed Cost
F
1,000,000
Operating Income
(EBIT)
Interest
F
250,000
EBT
Taxes (34%)
V
Earnings After Taxes
Preferred Dividends
F
150,000
Earnings available to
common stockholders
Earnings per share
assuming 50,000
shares
Calculate The Degree of Financial Leverage
4.88x
4.89x
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