What is the firm degree of operating leverage of the firm

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1. What is the future value of a $940 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

2. Assume that a firm's degree of financial leverage (DFL) is 1.2. If sales this year increase by 20 percent, the firm expects a 60 percent increase in earnings per share (EPS). What is the firm's degree of operating leverage of the firm?

3. Calculate the price of a zero-coupon bond that matures in 15 years if the market interest rate is 3.5 percent. Assume semiannual compounding. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Reference no: EM132052855

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