Problem on shares of common stock outstanding, Accounting Basics

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Problem on shares of common stock outstanding

With 800,000 shares of common stock outstanding earned $1.6 million in operating income (EBIT) during 2012. It also paid $1.2 million in interest and $200,000 in taxes in 2012. (a) Calculate its degree of financial leverage. (b) Use 2012's DFL to forecast 2013 EPS if pro forma EBIT for 2012 is $3.6 million. (assume interest paid and shares of common outstanding remain unchanged) Show your work and explain your calculations.

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Accounting Basics: Problem on shares of common stock outstanding

Reference No:- TGS043302

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Recent Questions Asked Accounting Basics

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Problem on shares of common stock outstanding

Reference No:- TGS043302

Recent Questions Asked Accounting Basics

Q : What is the growth rate

Q : Abdominal hysterectomy

Q : What tests can be used to detect these complications

Q : Analyze the traits presence in the various individual

Q : Problem on shares of common stock outstanding

Q : Definition of invasive species

Q : Tax liability under the various approaches

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Q : Minimize any tax obligations

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