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You and your colleague, Malik, are currently participating in a finance Internship program at fronworks Railroad. Your current assignment is to work together to review

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You and your colleague, Malik, are currently participating in a finance Internship program at fronworks Railroad. Your current assignment is to work together to review Ironworks's current and projected income statements. You will also assess the consequences of management's capital structure and investment decisions on the firm's future riskiness. After much discussion, you and Malik decide to calculate Ironwork's degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total leverage (DTL) based on this year's data to gain Insights into fronworke's risk levels, The most recent income statement for Ironworks Railroad follows. Ironworks is funded solely with debt capital and common equity, and it has 2,000,000 shares of common stock currently outstanding, This Year's Data $60,000,000 36,000,000 24,000,000 12,000,000 Sales Less: Variable costs Gross profit Less: Fixed operating costs Net operating income (EBIT) Less: Interest expense Taxable income (EST) Less: Tax expense (40) Net Income Earnings per there (UPS) 12,000,000 1,200.000 10,800,000 4,320,000 56,480,000 Next Year's Projected Data 564,500,000 38,700,000 25,300,000 12,000,000 13,000,000 1,200,000 12,600,000 5,040,000 $7,560.000 53.75 ory Given this information, complete the following table and the answer the questions that follow. When performing your calculations, round your EPS and percentage change values to two decimal places Ironworks Railroad Data DOL (Sales160,000,000) DFL (EBIT - $12,000,000) OTL (Sales - 560.000.000) . Everything else remaining constant, assume Tronworks Railroad decides to sell 520,000 shares of preferred stock that would pay s4 per share per year In cash dividends. How would this affect tronworks's DOL, FL, and DCLY The DOL would be expected to The DFL would be expected to The DTL would be expected to

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