Computation of eps

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Computation of EPS

The company expects sales if silicon chips to be$60 million this year Because this is a very capital intensive business fixed operating cost are$20 million the variable cost ratio is 40% the firm's debt obligations consist of a$4 million 10% bank loan and a$2 million bond issue with a 11 % coupon rate. The company has 1 million shares of common stock outstanding and its marginal tax rate is 40%. I need to compute the degree if operating leverage and financial leverage and the combined leverage. Compute EPS if sales is declined by 5%.

Reference no: EM1310267

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