What is the Degree of Operating Leverage (DOL), Degree of Financial Leverage (DFL) and Degree of Combined Leverage (DCL)?

Q: Calculate the following ratios: return on equity, return on assets (levered), return on sales…

A: Ratio analysis helps business to know the financial position of it using the interpretation of the…

Q: What is meant by the term financial leverage?

A: Borrowed Capital: The money which is borrowed by a company from outsiders for a specified period of…

Q: What is the process to express leverage is in terms of the company's debt-to-equity ratio?

A: Leverage ratio: It overlooks the mixture of debt and equity which is required for analyzing the…

Q: Sales 60000 Variable Costs 36000 Fixed Costs Earnings Before Interest and Tawes 20000 4000 Interest…

A: In order to determine the degree of financial leverage, the Earnings before interest &  tax are…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: When computing the Weighted Average Cost of Capital (WACC), what are the primary variables used?

A: The weighted average cost of capital (WACC), which includes common stock, preferred stock, bonds,…

Q: What is meant by positive financial leverage?  What about negative financial leverage?

A: Leverage -It refers to the use of source of funds  for which the firm has to pay a fixed cost.

Q: Amazon equity beta Market risk premium 1.5 5.00% 10-year Treasury 1 Jan 2020 Cost of equity 1.90%…

A: cost of equity = Risk free rate + beta * market risk premium

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: Define the term leverage. And method of computing degree of leverage.

A: Financial Accounting:- The term financial accounting includes recording, summarizing and reporting…

Q: 3. Give an example of CVP and Compute BEP, Changes in Net Income, Margin of Safety, and Degree of…

A: The CVP Analysis is the analysis of the cost accounting i.e. the a way to find out how changes in…

Q: What are the two different formulas used to Calculate the degree of financial leverage (DFL)?

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: lain the relationship between return on equity (ROE), return on asset (ROA), and leverage effect.…

A: Return on equity and return on assets shows how much is the profit earned by the company and are…

Q: Define each of the following terms:b. Operating leverage; financial leverage; break-even point

A: Answer: Operating leverage: This is the degree to which the company employs the fixed costs. The…

Q: Differentiate operating leverage from financial leverage.

A: Leverage is the amount of fixed costs a company has in its income statements. Greater leverage leads…

Q: Which of the following ratios measures financial leverage? a. The return on assets ratio. b. The…

A: Answer: d. The debt to equity ratio.

Q: Using the Van Accessible data from Table 5–4:a. Calculate the degree of operating leverage (DOL).b.…

A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: What is the mathematical formula of dollar duration of equity and how do you derive it?

A: Dollar duration of equity is a financial metric used to measure the sensitivity of the market value…

Q: What is Basic Calculations of Financial Leverage?  Please provide example.

A: Financial Leverage:It represents that how a company uses its debt to acquire assets. It also shows…

Q: The following information relates to fin ancial projections of NUBDCompany: Projected sales…

A: Degree of operating Leverage: Degree of Operating Measure that in response to change in sales how…

Q: 2021 Industry Average Ratio Analysis Est. 2020 2019 Liquidity Ratios Current Ratio (times) 4. 2…

A: Liquidity Ratio: It shows how much the enterprise is liquidate or for how much time it can complete…

Q: How is leverage expressed in DuPont Ratio System? a) Total Debt / Equity b) Total Debt / Total…

A: Dupont ratio system is used to analysis the financial statements and assess its financial condition.…

Q: Why is the operating return on assets ratio also referred to as the operating returnon investment?

A: Introduction: Operating asset return is nothing but a profitability measure and it is a difference…

Q: What is the Cost of Equity? What is the Weighted Average Cost of Capital? WACC

A: Interest on debt = 9% Weight of Debt = 60% Weight of Equity = 40% Risk Free Rate in USA = 6% Risk…

Q: What is Degree of financial Leverage and Degree of combined Leverage and its importance.

A: Financial Leverage: It refers to the inclusion of debt for funding the operations of business. It is…

Q: what are liquidity ratios, leverage ratios, profitability ratios, and market measure rat

A: Ratios are calculated in order to identify the ability of the company from various parameters.

Q: What are the measures of investment worth based on yield? What are they called?

A: Investment worth based on yield means that an investor is expecting certain income on an investment…

Q: Explain the relationship between the weighted average cost of capital (WACC), the maximization of…

A: Optimal capital structure of the firm explains the relationship between the weighted average cost of…

Q: What is the nominal return associated with an investment in capital, and why?

A: Nominal Return is the amount of money generated by an investment.

Q: Calculate the financial leverage - equity multiplier and cash cover ratio

A: Equity Multiplier = Total Assets/Total Equity 2019 = 22,634,774/9,538,652 = 2.373 2020 =…

Q: Identify three measures of the extend of leverage calculated by FCI.

A: Leverage:   Leverage measures overlook the mixture of debt and equity which is required for…

Q: How does the capital asset pricing model (CAPM) influence financial decisions regarding risk and…

A: CAPM is related to the connection between the securities and their expected returns. CAPM is…