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:

Ideology

A set of beliefs, values, and opinions that shapes the way an individual or a group perceives the world and acts within it.

Wealth Distribution

The manner in which wealth is allocated among individuals or groups within a society.

Community Power Debate

Debate in the field of political science about the nature of power that existed in society. The two camps in the debate were the elitists and the pluralists.

Privileged

Enjoying special rights, advantages, or immunities not available to others.