Question 6 Suppose that in 2016, Global launches an aggressive marketing campaign that boosts sales by 15%. However, their operating margin falls from 5.57% to 4.50%. Suppose that they have no other income, interest expenses are unchanged, and taxes are the same percentage of pretax income as in 2015. a) What is Global's EBIT in 2016? b) What is Global's net income in 2016? c) If Global's P/E ratio and number of shares outstanding remains unchanged, what is Global's share price in 2016? TABLE 2.2 Global Conglomerate Corporation Income Statement Sheet GLOBAL CONGLOMERATE CORPORATION Income Statement Year Ended December 31 (in S million) 2015 Total sales 186.7 Cost of sales (153.4) Gross Profit 33.3 Selling, general, and administrative expenses (13.5) Research and development (8.2) Depreciation and amortization (1.2) Operating Income 10.4 Other income Earnings Before Interest and Taxes (EBIT) 10.4 Interest income (expense) (7.7) Pretax Income 2.7 Taxes (0.7) Net Income 2.0 Earnings per share: $0.556 Diluted earnings per share: $0.526 2014 176.1 (147.3) 28.8 (13.0) (7.6) (1.1) 7.1 - 7.1 (4.6) 2.5 (0.6) 1.9 $0.528 $0.500