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CAN ANYONE HELP ME TO ANSWER THE ABOVE QUESTIONS PLEASE ? (b) Some selected financial information of Nova Ltd. are as follow: Dividends paid to
CAN ANYONE HELP ME TO ANSWER THE ABOVE QUESTIONS PLEASE ?
(b) Some selected financial information of Nova Ltd. are as follow: Dividends paid to preferred stockholders Common stocks (1 million shares at RM15 per share) Earnings before tax RM 2,000,000 15,000,000 25,000,000 In addition, the debt-financing of Nova Ltd. is formed entirely by long-term bank loans that amounting to RM30,000,000 at 10% interest payment per annum. The marginal tax rate of Nova Ltd. is 40%. Compute the earnings before interest and tax (EBIT) and the earnings per share (EPS) of Nova Ltd. (6 marks) (ii) Compute the degree of financial leverage (DFL) of Nova Ltd.(4 marks) (iii) Compute the new EPS of Nova Ltd. if its EBIT decreases to RM24,000,000 due to shrinkage in operations. (4 marks)Step by Step Solution
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