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XYZ company expects in the coming year: sales of 40,000 units at $10 per unit, variable operating costs of $4 per unit, fixed operating costs of $30,000, interest of $50,000, and preferred stock

XYZ company expects in the coming year: sales of 40,000 units at $10 per unit, variable operating costs of $4 per unit, fixed operating costs of $30,000, interest of $50,000, and preferred stock dividends of $24,000. The Company is in the 40% tax bracket 1. Compute XYZ company's Degree of Total Leverage (DTL) and explain its meaning. 2. IfXYZ company's Earnings Per Share (EPS) is currently $7.2, estimate its EPS in case of a 10% increase in sales revenue

Apr 12 2021 View more View Less

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