A company posts a 25% increase in sales,a degree of financing leverage of 2.4,and a degree of total leverage of 3.2.Find the % change in the earnings per share.
A) 50%
B) 33.33%
C) 80%
D) 24%
E) 30%

Question

Quizplus · Accepted Answer

DTL = DOL × DFL = 11ea7fdb_fc5a_199a_a768_f59a46ce277a_TB2902_11 × 11ea7fdb_fc5a_199b_a768_75a32df42bfb_TB2902_11 3.2 = 11ea7fdb_fc5a_199c_a768_43f6dbec15c4_TB2902_11 × 2.4
%ΔEBIT = 11ea7fdb_fc5a_199d_a768_3bea9e2f52b0_TB2902_11 × 25% = 0.3333 or 33.33%
2.4 = 11ea7fdb_fc5a_199e_a768_e5947a04c8d8_TB2902_11 %ΔEPS = 0.79992 or 80%

A Company Posts a 25% Increase in Sales,a Degree of Financing