13 2.5 DUL degree of operating leverage, and a 2.0 DFL (degree of financial leverage). If it wants a 35% increase in EPS, what increase in sales does it need? a. 6%. b. 7%. c. 9%. d. 35% 30. Which of the following statements about PE ratios is correct? a. If the required return for shareholders decreases, it will cause the PE ratio to increase b. Without considering changes to price, if EPS decreases, it will result in a lower PE ratio. c. The payout ratio and the PE ratio are inversely related d. If the dividend growth rate increases and the retention ratio decreases, then the PE ratio will decrease. 31. Durr Inc. sells 80,000 widgets for $20 each. Durr incurs $5 in variable costs per unit and has $400,000 of variable cost. Durr's degree of operating leverage is ? 2 1 .0. b. 1.5. C 2.0. d. 2.5. 32. Which of the following stages of the industry life cycle is characterized by modest sales growth and small or negative profit margins? a Pioneering development. b. Mature growth. C. Market maturity. d Market decline. 23. Which of the following stages of the industry life cycle is characterized by limited competition and hiel margins? a. Pioneering development b. Mature growth. c. Market maturity. d. Rapid growth