Leverages considers effect on earnings per share

Assignment Help Financial Management

Reference no: EM131905386

1. Which of the following leverages considers the effect on earnings per share (EPS) of the changing operating income (EBIT)??

a. ?Financial leverage

b. ?Combined leverage

c. ?Operating leverage

d. ?Total leverage

e. ?Contribution leverage

2. If a firm does not meet its forecasted sales level, then leverage will result in a magnified loss in income compared to what is expected because:?

a. ?inventories will be built very slowly.

b. ?sales operations will be reduced drastically.

c. ?additional external funds needed will be reduced.

d. ?production facilities will be expanded greatly.

e. ?retained earnings will increase rapidly.

Reference no: EM131905386

Questions Cloud

Present value of cost to purchase the anvils from supplier : What is the present value of the cost to purchase the anvils from a supplier? What is the present value of the cost to manufacture the anvils internally?

Gabrielle takes prize as annuity : Gabrielle just won $3.3 million in the state lottery. If Gabrielle takes the prize as an annuity, the present value of the 30 year ordinary annuity is $?

What is the npv for the project if required return : What is the NPV for the project if the required return is 10 percent? What is the NPV for the project if the required return is 26 percent?

What is the present value of cash flows : What is the present value of the cash flows?

Leverages considers effect on earnings per share : Which of the following leverages considers the effect on earnings per share (EPS) of the changing operating income (EBIT)??

Decides to issue equity to finance purchase : Suppose Stephenson decides to issue equity to finance the purchase ?

What is the price per share of the firm stock : Construct Stephenson’s market value balance sheet after both the debt issue and the land purchase. What is the price per share of the firm’s stock?

Equity to finance the land purchase : If Stephenson wishes to maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase?

What will the market value of the stephenson company : What will the market value of the Stephenson company be if the purchase is financed with debt?

User Account

All Pages