Degree of Operating Leverage
JMC Corp. also wants to double its sales to 1,000,000 bottes next year. Towards that it plans to restructure its capital. It currently is financed entirely by equity of $200,000. It plans to reduce its equity 50% and borrow long-term debt of $200,000 @ 5% interest cost.
Calculate the new Degree of Operating Leverage (DOL)
Show all calculations
Using the case below calculate the new Degree of Operating Leverage (DOL) and show all calculations.
