A Firm Expects to Have a 15 Percent Increase in Sales

question 20

Multiple Choice

A firm expects to have a 15 percent increase in sales over the coming year. If it has operating leverage equal to 1.25 and financial leverage equal to 3.50, then what will be the percentage change in earnings per share (EPS) ?

• A) 30%
• B) 47%
• C) 66%
• D) 15%
• E) 22%

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Definitions:

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