Degree of operating leverage

Assignment Help Financial Management

Reference no: EM13768122

The CFO of Jupiter Jibs (JJ) expects this year's sales to be $2.5 million. EBIT is expected to be $1 million. The CFO knows that if sales actually turn out to be $2.3 million, JJ's EBT will be $888,000. What is JJ's degree of operating leverage (DOL)?

Reference no: EM13768122

Questions Cloud

What it the probability that a randomly selected : The Netherlands is one of the world leaders in the production and sale of flowers.Supposed the heights of the tulips in the greenhouse of Rotterdam's fantastic Flora follow a continuous uniform distribution with a lower bound of 7 inches and an upper..

Calculate the expected number of employee accidents : The number of employee accidents from the housekeeping department in Hotel A is related to bed height, bed size, and spinal loading. The linear regression model formula has been calculated as following: Y = 3.9+ 8.5(X1) + 2.9(X2) + 5(X3). Calculate t..

Companys cost of equity capital : The Zombie Corporation’s common stock has a beta of 1.1. If the risk-free rate is 5.1 percent and the expected return on the market is 13 percent, what is the company’s cost of equity capital?

Degree of operating leverage : The CFO of Jupiter Jibs (JJ) expects this year's sales to be $2.5 million. EBIT is expected to be $1 million. The CFO knows that if sales actually turn out to be $2.3 million, JJ's EBT will be $888,000. What is JJ's degree of operating leverage (DOL)..

What is its sustainable growth rate : SGS Corp. has an ROE of 9 percent and a payout ratio of 17 percent. What is its sustainable growth rate? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Cost of equity capital using both dividend capitalization : Tri-County Inc. pays an annual common stock dividend of $1.80 per share. The dividend has shown a constant growth rate over the past 5 years from $1.10 to its present level. This growth trend is expected to continue. The company's dividend payout rat..

Debt-to-total-assets ratios and interest rates on debt : Firm AB and Firm YZ are identical except for their debt-to-total-assets ratios (D/TAs) and interest rates on debt. Each has $200,000 in assets, $40,000 EBIT, and a 40 percent marginal tax rate. Firm AB has a D/TA ratio of 40 percent and pays 7.5 perc..

Both the cost of debt as the cost of equity : What is the impact of hedging on a firm’s overall cost of capital? Will it affect both the cost of debt as the cost of equity? Explain.

User Account

All Pages