Apr
4
Please help me with this?
Filed Under Investing
gale1999_2000 asked:
Albatross Airline’s fixed operating costs are $5.8 million, and its variable cost ratio is 0.20. The firm has$2 million in bonds outstanding with a coupon interest rate of 8 percent. Albatross has 30,000 shares of preferred stock outstanding, which pays a $2 annual dividend? There are 100,000 shares of common stock outstanding. Revenues for the firm are $8 million, and the firm is in the 40 percent corporate income tax bracket.
Albatross Airline’s fixed operating costs are $5.8 million, and its variable cost ratio is 0.20. The firm has$2 million in bonds outstanding with a coupon interest rate of 8 percent. Albatross has 30,000 shares of preferred stock outstanding, which pays a $2 annual dividend? There are 100,000 shares of common stock outstanding. Revenues for the firm are $8 million, and the firm is in the 40 percent corporate income tax bracket.
a. Compute Albatross’ degree of operating leverage.
b. Compute its degree of financial leverage.
c. Compute its degree of combined leverage and interpret this value.
ROB
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2 Responses to “Please help me with this?”
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Can help you,
but too big a problem for a mere 2 points.
(honestly. If it was 10 points, then “I’ll be back”) lol
Best is to consult your Stock Broker who will have additonal news apart from the ratios you desire to be evaluated.
The competance of analysis be left to the experts and even they fail in their judgements and decisions.