Answered

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Calculate a company's total leverage given the following information:

Change in sales = 3%
Change in earnings = 9%

Sagot :

Explanation:

Given that,

Change in sales = 3%

Change in earnings = 9%

We need to find a company's total leverage.

Total leverage is equal to the ratio of percentage change in earnings per share to percentage change in sales revenue.

[tex]\text{leverage }=\dfrac{9\%}{3\%}\\=3[/tex]

Hence, company's total leverage is 3 units.

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