Suppose that in 2019, Global launches an aggressive marketing campaign that boosts sales by 15%.

However, their operating margin falls from 5.57% to 4.50%. Suppose that they have no other income, interest expenses are unchanged, and taxes are the same percentage of pretax income as in 2018.

a. What is Global’s EBIT in 2019?

b. What is Global’s net income in 2019?

c. If Global’s P/E ratio and number of shares outstanding remains unchanged, what is Global’s share price in 2019?

AppendixLO1