Determine earnings per share related

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Degree of financial leverage Northwestern Savings and Loan has a current capital structure comprised of $ 250,000 of debt at 16% annual interest and 2,000 common shares. The company pays taxes at the rate of 40%.

Problem a) With EBIT values ??of $ 80,000 and $ 120,000, determine earnings per share (GPA) related.

Problem b) Take the $ 80,000 of EBIT as a base and calculate the degree of financial leverage (GAF).

Problem c) Work again with items a) and b) assuming that the company has $ 100,000 of debt at 16% annual interest and 3,000 common shares.

Reference no: EM132950622

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