Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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2. The following information is extracted for a company.
Details
Sales quantity
EBIT
Earnings available to common stakeholders 20,000 24000
Number of Shares
Year 1 Year 2
60,000 90000
10,000 12000
2000 2000
a) Based on the above table, First find EPS and then
calculate the degree of operating leverage (DOL), degree
of financial leverage (DFL), and the degree of total
leverage (DTL).
b) Explain your answers
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Transcribed Image Text:2. The following information is extracted for a company. Details Sales quantity EBIT Earnings available to common stakeholders 20,000 24000 Number of Shares Year 1 Year 2 60,000 90000 10,000 12000 2000 2000 a) Based on the above table, First find EPS and then calculate the degree of operating leverage (DOL), degree of financial leverage (DFL), and the degree of total leverage (DTL). b) Explain your answers
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