Reference no: EM132554529

1) A company produces polyester only. Fixed costs are $10.000. Break-even sales amount of polyester is $120.000. Sales price is 10 $/kg. What is the unit contribution margin at the break-even point?

a) $0,63
b) $0,73
c) $0,83
d) $0,93

2) Suppose that a company that has 25.000 outstanding shares will require a new financing of $500.000 from 50% common stock issuance and 50% bond issuance. All common stocks are sold at $10 per share (25.000 shares) and all bonds have a coupon rate of 8%. Expected EBIT is $100.000. Income tax rate is 20%. What is the variability of EPS?

a) 1,25
b) 1,27
c) 1,23
d) 1,29
e) Other:

3) Suppose that the company in Question 1 and the company in Question 2 are the same firm. What would be the degree of total leverage?

a) 1,18
b) 1,28
c) 1,38
d) 1,48
e) Other: