If a Firm Has Current Earnings Per Share of $2

question 39

Multiple Choice

If a firm has current earnings per share of $2 and a degree of operating leverage of 4, a 10% increase in sales would result in earnings per share of:

• A) $2.80
• B) $8
• C) $2.20
• D) cannot tell from this information

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Definitions:

Singles

Individuals who are not married, in a civil partnership, or in a cohabiting relationship, often highlighting their state of being unmarried.

One-Parent Families

Households led by a single parent raising one or more children, due to various circumstances such as divorce, death, or single adoption.

Mother-Child Families

Family units consisting of a mother and her child or children, often referred to in the context of single-parent households.

Grandmother-Child Families

Family structures where grandchildren are raised by their grandmothers in the absence or limited involvement of the children's parents.