2. 26. Operating leverage and taxes [LO 11.4] Show that if we consider the effect of taxes,...

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2. 26.

Operating leverage and taxes [LO 11.4] Show that if we consider the effect of taxes, the degree of operating leverage can be written as:

DOL = 1 + [FC × (1 − TC) − TC × D]/OCF Notice that this reduces to our previous result if TC = 0. Can you interpret this in words?

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Fundamentals Of Corporate Finance

ISBN: 9781743768051

8th Edition

Authors: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch, Kristoffer Glover, Randolph W. Westerfield, Bradford D. Jordan

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Question Posted: Oct 03, 2024 04:04 AM

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2. 26. Operating leverage and taxes [LO 11.4] Show that if we consider the effect of taxes,...

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Fundamentals Of Corporate Finance

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