7. The computation and interpretation of the degree of combined leverage (DCL) You and your colleague, Emily, are currently participating in a finance internship program at Torres Industries. Your current assignment is to work together to review Torres's current and projected income statements. You will also assess the consequences of management's capital structure and investment decisions on the firm's future riskiness. After much discussion, you and Emily decide to calculate Torres's degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total leverage (DTL) based on this year's data to gain insights into Torres's risk levels. The most recent income statement for Torres Industries follows. Torres is funded solely with debt capital and common equity, and it has 2,000,000 shares of common stock currently outstanding This Year's Data Next Year's Projected Data Sales Less: Variable costs Gross profit Less: Fixed operating costs Net operating income (EBIT) Less: Interest expense Taxable income (EBT) Less: Tax expense (40%) Net income Earnings per share (EPS) $80,000,000 32,000,000 48,000,000 28,000,000 20,000,000 4,000,000 16,000,000 6,400,000 $9,600,000 $4.80 $86,000,000 34,400,000 51,600,000 28,000,000 23,600,000 4,000,000 19,600,000 7,840,000 $11,760,000 $5.88 Given this information, complete the following table and then answer the questions that follow When performing your calculations, round your EPS and percentage change values to two decimal places Torres Industries Data DOL (Sales = $80,000,000) DFL (EBIT = $20,000,000) DTL (Sales = $80,000,000) Everything else remaining constant, assume Torres Industries decides to sell 520,000 shares of preferred stock that would pay $ Torres's DOL, DFL, and DCL? ar in cash dividends. How would this affect increase decrease remain constant . The DOL would be expected to .The DFL would be expected to .The DTL would be expected to