Question
Royal Yellow Berhad reports sales of RM6,000,000, variable costs of RM1,000,000 and fixed operating costs of RM1,800,000. The companys total debt is RM200,000 with an
Royal Yellow Berhad reports sales of RM6,000,000, variable costs of RM1,000,000 and fixed operating costs of RM1,800,000. The companys total debt is RM200,000 with an interest rate of 10% and its marginal tax rate is 28%.
- Calculate the break-even in sales dollar for the firm.
- What is Royal Yellow Berhads degree of operating leverage, degree of financial leverage and degree of total leverage at this level of output?
- Calculate the new EPS for Royal Yellow Berhad next year when sales increase by 30%. Currently the firm has 1,000,000 shares outstanding.
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Quantitative Finance: An Object-Oriented Approach In C++
Authors: Erik Schlogl, Dilip B. Madan
1st Edition
1584884797, 978-1584884798
