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Kiwi Airlines has fixed operating costs of $5.8 million, and its variable costs amount to 20 percent of sales revenue. The firm has $2 million
Kiwi Airlines has fixed operating costs of $5.8 million, and its variable costs amount to 20 percent of sales revenue. The firm has $2 million in bonds outstanding with a coupon interest rate of 8 percent. Revenues for the firm are $8 million and the firm is in the 40 percent corporate income tax bracket. How will a 10 percent increase in sales affect earnings per share? \begin{tabular}{c} 154.7% \\ \hline 145% \\ \hline 197.74% \\ \hline 19.72% \\ \hline 533.5% \end{tabular}
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