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Homework #7B (Financial leverage)
Question 4 (1 point)
Use the following information about Rat Race Home Security, Inc. to answer the questions:
Average selling price per unit $305.
Variable cost per unit $185
Units sold 437
Fixed costs $7,613
Interest expense 19,581
Based on the data above, what will be the resulting percentage change in earnings per share of Rat Race Home Security, Inc. if they expect operating profit to change -3.5 percent?
(You should calculate the degree of financial leverage first).
(Write the percentage sign in the "units" box).
Round the answer to two decimals
