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A Firm Expects to Have a 15 Percent Increase in Sales

Question 37

Multiple Choice

A firm expects to have a 15 percent increase in sales this year. If its degree of operating leverage is 1.2 and its degree of financial leverage is 3.5, what will be the percentage change in earnings per share (EPS) this year?


A) 4.2%
B) 48.05%
C) 63.0%
D) 52.5%
E) 18.0%

Correct Answer:

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