You are given two companies. Company A is expected to return 10% with standard deviation of 23%. The beta of Company A is 1.75.
1 answer:
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Answer: Percentage change OCF = 27.96%.
Explanation:
Given that,
Output level = 59,000 units
Degree of operating leverage = 3.3
Output rises to 64,000 units,
Degree of Leverage =
Percentage change OCF = Degree of Leverage × Percentage change in Quantity
=
= 27.96%
Answer:
B. $2,732,000.
Explanation:
After-tax operating income (ATI) = $3,200,000
Weighted-average cost of capital (WA) = 9%
Assets (A) = $7,000,000
Liabilities (L) = $1,800,000
Economic value added (EVA) is given by:
Endotrope's economic value added is $2,732,000