Chapter 5

As return on assets becomes greater than the interest rate, financial leverage becomes more favorable for Hall. c. 12% ( $300,000 = $36,000 break-even level for EBIT. 16. In Problem 15, compute the stock price for Hall Pharmaceuticals if it sells at 13 times earnings per share and EBIT is $80,000. 5-16. Solution: Hall Pharmaceuticals (Continued) ................
................