A Firm Has an Increase in EPS of 5%,increase in EBIT

question 31

Multiple Choice

A firm has an increase in EPS of 5%,increase in EBIT of 3%,and a degree of total leverage of 2.What is the firm's percentage change in sales?

• A) 2.5%
• B) 1.5%
• C) 1.0%
• D) 4.2%
• E) Cannot be determined with the information provided.

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Definitions:

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from all members and seeks to minimize the influence of dominant personalities.

Roundtable Discussion

A meeting format where participants, often experts or stakeholders, gather to discuss topics in an open and equal manner, usually seated at a round table to symbolize no hierarchical structure.

Elaboration Likelihood Model

A theory in psychology that explains how the persuasion of a message depends on the likelihood of cognitive processing by the receiver.

Peripheral Route

One of two ways persuasive communication can cause attitude change according to the Elaboration Likelihood Model, where people are influenced by incidental cues, such as the attractiveness or credibility of the source, rather than the strength of the arguments.