Answer: a. 1.42
b) 2.74
c) 3.89
Explanation:
a) The Degree of Operating Leverage measures how much operating Income will change by if Sales change.
It is calculated with the formula,
= (Sales - Variable Costs) / (Sales - Variable Costs - fixed costs)
= (960,000 - 532,000) / (960,000 - 532,000 - 127,000)
= 1.42
b) The Degree of financial leverage measures how much Income will change due to a change in operating Income.
The formula is,
=Earnings before Interest and tax / Earnings before Interest and tax - Interest or just Earning before tax
= 301,000/110,000
= 2.74
c. Degree of Total Leverage is a measure of how sensitive the net income of a company is to a change in goods produced and/or sold.
It is calculated by multiplying DOL and DFL.
= 1.42 * 2.74
= 3.89
Should you need any clarification just hit that comment button. Cheers.
Hello There!
<span>During the selling era, the prevalent business philosophy turned from an emphasis on production to an emphasis on advertising and selling.</span>
Hope This Helps You!
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- Hannah ❤
Read the fine print, if it says “after signing, this contract is final.” Then Otto is screwed, because he must pay the $50,000
Or, Otto could hire a lawyer to fight it in court
Hope this helped ♥︎
Prime rate is (a) the best interest rate that banks offer their most creditworthy customers.
A prime rate is decided by the bank to lend money to its customers where the credit giving is decided on the basis of the credit history and points on the customers formally known as the credit rate of investment.
It totally depends upon the allowance of credit by financial institutions and then the payment made by the loan taking customers within a stipulated time frame.
To learn more about prime rate here,
brainly.com/question/28235888
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Answer:
$16.21
Explanation:
Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.
Dividend Payment $1.10
Growth rate first 3 years 10%
Growth rate first 4 years 3.2%
Required rate of return 12%
Dividend Discount Factor PV Factor
First year Dividend $1.21 0.892857143 $1.08
Second year Dividend $1.33 0.797193878 $1.06
Third year Dividend $1.46 0.711780248 $1.04
Fourth year Dividend $1.61 0.635518078 $1.02
Stock value after fourth year = $18.89 0.635518078 <u>$12.00 </u>
Stock Value <u>$16.21 </u>
