p13-11

c. Graph the DOL rgures that you tmpute part b (on the y-axisj agamst base sales levels (on the x-axis). d. Compute the degree of operating leverage at 24,000 units; add this point to your graph. e. What principle do your graph and figures illustrate? P13-11/ EPS calculations Southland Industries has $60,000 of 6% (annual interest) bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of S5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT a. $24,600 b. $30,600 c. $35,000 Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 16% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 21% P13-12 10 oog datrmine te associated earning