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5, (3 pts) (Cfin,12-13) The CFO of the Chop Shop has determined that the company's degree of operating leverage (DOL) is 2.5x and that its
5, (3 pts) (Cfin,12-13) The CFO of the Chop Shop has determined that the company's degree of operating leverage (DOL) is 2.5x and that its degree of financial leverage (DFL) is 3.0x. According to this information, how will the firm's EPS be affected if its amount of EBIT turns out to be 5 percent higher than expected? 6, (3 pts) (Cfin,13-1)Desert A/C plans to invest $50 million to to maintain a 60% debt/asset ratio in its capital expand operations. The firm wants structure. If net income is expected to be $25 million this year and Desert follows the residual dividend policy, what amount of dividends will be paid this year
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