A firm has EBIT of $375,000, interest expense of $75,000, preferred dividends of $6,000 and a tax

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A firm has EBIT of $375,000, interest expense of $75,000, preferred dividends of $6,000 and a tax rate of 40%. The firm's degree of financial leverage at a base EBIT level of $375,000 is:
A. .97
B. 1.29
C. 1.27
D. 1.09

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Principles of Managerial Finance

ISBN: 978-1408271582

Arab World Edition

Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix

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Question Posted: Apr 30, 2013 07:54 AM

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A firm has EBIT of $375,000, interest expense of $75,000, preferred dividends of $6,000 and a tax

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C 127 Computation of Firms Degree of ...View the full answer

Principles of Managerial Finance

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