What will happen to eps if operating income increases

Assignment Help Financial Management
Reference no: EM131336873

Earnings per share (EPS) for Valcor, Inc., are $3 at a sales level of $2 million.

If Valcor's degree of operating leverage is 2.0 and its degree of combined leverage is 8.0, what will happen to EPS if operating income increases by 3 percent?

Reference no: EM131336873

Questions Cloud

Determine rate of condensation on a 100-mmdiameter sphere : Determine the rate of condensation on a 100-mmdiameter sphere with a surface temperature of 150°C in saturated ethylene glycol vapor at 1 atm. Approximate the liquid properties as those corresponding to saturated conditions at 373 K
What conclusion can be made about the observed difference : The value of the t-Test Statistic for the observed differences was -4.7, where the p-value is less than 0.0002. What conclusion can be made about the observed difference?
What is mcgonnigals current degree of financial leverage : What is McGonnigal's degree of operating leverage at a sales level of $40 million?- What is McGonnigal's current degree of financial leverage?
Retail-manufacturing-coca cola : Essay Read "In the Real World - Retail/Manufacturing - Coca Cola" on page 233 in the textbook, and answer the Quick Preview questions on page 234.
What will happen to eps if operating income increases : If Valcor's degree of operating leverage is 2.0 and its degree of combined leverage is 8.0, what will happen to EPS if operating income increases by 3 percent?
Staffing models and labor optimization algorithms contribute : Discuss why productivity is important, particularly in a healthcare organization. How do staffing models and labor optimization algorithms contribute towards productivity? During project management, productivity is also necessary. If a project is ..
Discuss the changes to our criminal justice system : If you were able to implement changes to our Criminal Justice System, what changes would you make? Each student is expected to examine issues facing our communities, criminal justice system, justice in America, etc.
Estimate the time required for the sphere : Using the lumped capacitance method, estimate the time required for the sphere to reach an equilibrium condition. How much condensate (kg) was formed during this period?
Discussion think about your family of origin : For this Discussion, think about your family of origin. Consider the strengths particular to your family of origin. Imagine how those strengths might play a part in helping your family to overcome a challenging situation

Reviews

Write a Review

Financial Management Questions & Answers

  Wbs could help the team in estimating financial services

Explain how your specific WBS could help the team in estimating, planning, and understanding project requirements, deliverables, and efforts required to meet the financial services legacy system migration.

  Whats value of stock that is expected to pay dividend

What’s a value of a stock that is expected to pay a dividend of $2, starting a year from now, and then increase the dividend at a rate of 6% per year, indefinitely? Given the expected rate of return is 8%.

  What is the equivalent annual annuity of project

Project S has cash flows of (600), 400, 300. Project L has cash flows of (900), 300, 400, 500. Both projects have a required return of 8%. The projects are mutually exclusive and repeatable. What is the Equivalent Annual Annuity of Project S? What is..

  Find the dollar-weighted annual rate of investment return

ason's trust fund has a value of 100,000 on January 1st, 2014. On April 1st, 2014 10,000 is withdrawn from the fund, and immediately after this withdrawal the fund has a value of 95,000. On January 1st, 2015 the fund value is 115,000. find the time-w..

  Calculate the total return for investment

John Smith purchased 100 shares of XYZ stock at $40.00 a share. One year leter, he sold the stock for $50.00 a share. He paid a broker a $32.00 commission when they purchased the stock and a $40.00 commission when they sold the stock. During the 12-m..

  Nonconstant growth stock valuation

Assume that the average firm in your company's industry is expected to grow at a constant rate of 7% and that its dividend yield is 5%. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&..

  Explain how eurocurrency is created.

Explain how Eurocurrency is created.

  Present value of a future payment

a. $1000 invested for 5 years with simple annual interest of 10% would have a future value of _________. b. $1000 invested for 5 years at 10%, compounded annually has a future value of _________. c. Present value of a future payment of $10,000 at the..

  Which project does a risk averse manager prefer

Project A generates $5,000.00 in revenue two years from today and costs $4,000.00. Project B generates $4,000.00 (50% probability) or $6,000.00 (50% probability) one year from today and costs $4,500.00. Assuming a discount rate of 12% for both projec..

  Determine the profit from an index arbitrage

If the stock index is at 148, the three-month futures price is 151, the dividend yield is 5 percent and the interest rate is 8 percent, determine the profit from an index arbitrage if the stock ends up at 144 at expiration. (Ignore transaction costs...

  What would be the value of the bond in this case

XYZ Company is planning to issue some bonds. The bonds, with a $5,000 par value and the coupon rate of 12% will mature in 10 years. The interest will be paid semi annually. Suppose two years later from the original issuing date, the going rate in the..

  Return compounded annually on its investment

The Dallas Development Corporation is considering the purchase of an apartment project for $100,000. They estimate that they will receive $15,000 at the end of each year for the next 10 years. At the end of the 10th year, the apartment project will b..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd