Earnings per share (EPS) for Valcor, Inc. are $3 at a sales level of $2 Million. If Valcor's degree of operating leverage is 2.0 and its degree of combined leverage is 8.0, what will happen to EPS if operating income increases by 3 percent?© BrainMass Inc. brainmass.com June 4, 2020, 2:20 am ad1c9bdddf
Degree of operating leverage=DOL=percent change in operating income/percent change in sales
Given, DOL=2.0 and ...
Solution discusses the impact of change in operating income on EPS in the given case.