Suppose that in 2016, Global launches an aggressive marketing campaign that boosts sales by 16%. However, their operating margin falls from 5.57% to 4.4%. Suppose that they have no other income, interest expenses are unchanged, and taxes are the same percentage of pretax income as in 2015. (See Table.)

10/19/2017 Data Table GLOBAL CONGLOMERATE CORPORATION Income Statement Year Ended December 31 (in $ millions) 2015 2014 186.70 176.10 Total sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization Operating Income Other income Earnings before interest and taxes (EBIT) Interest income (expense) Pretax income Taxes Net Income (153.40) (147.30) 33.30 28.80 (13.50) (13.00) (8.20) (7.60) 10.40 7.10 10.40 7.10 (7.70) (4.60) 270 2.50 (0.70) (0.60) 2.00 1.90 $0.556 $0.528 $0.526 $0.500 Earnings per share Diluted earnings per share: 10/19/2017 Data Table GLOBAL CONGLOMERATE CORPORATION Income Statement Year Ended December 31 (in $ millions) 2015 2014 186.70 176.10 Total sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization Operating Income Other income Earnings before interest and taxes (EBIT) Interest income (expense) Pretax income Taxes Net Income (153.40) (147.30) 33.30 28.80 (13.50) (13.00) (8.20) (7.60) 10.40 7.10 10.40 7.10 (7.70) (4.60) 270 2.50 (0.70) (0.60) 2.00 1.90 $0.556 $0.528 $0.526 $0.500 Earnings per share Diluted earnings per share