A company has a degree of operating leverage is 2 and degree of financial leverage is 3. If the sales of the company increase by 5% during the next…

CA Intermediate · Financial Management and Strategic Management · MTP · January 2025
A company has a degree of operating leverage is 2 and degree of financial leverage is 3. If the sales of the company increase by 5% during the next quarter, the Earning Per Share (EPS) will increase by?
(A) 20%
(B) 30%
(C) 50%
(D) 60%

Suggested Answer and Working Notes:

Correct Answer: Option (B)

30%

Topics: Part-A: Financial Management

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