10. T Corporation is authorized to issue 500,000 common stock at $10 par value. As of December 31, 2019 the corporation has 350,000 common stock issued and outstanding. On February 14, 2020, the market price of the stock is $17. On the same date, T Corporation acquired 50,000 stocks at $15. On March 5, 2020, the company reissued 25% of the treasury stocks at $20. Which of the following will be included in the entry to record the transaction on March 5, 2020?

A) Debit Treasury Shares $187,500

B) Debit Common Stock $250,000

C) Credit Additional Paid-in Capital $62,500

D) Credit Cash $250,000

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6. Calculate the degree of financial leverage for a firm with EBIT of $6,000,000, fixed cost of $3,000,000, interest expense of $1,000,000, preferred stock dividends of 800,000, and a 40 percent tax rate

A- 6.00

B- 9.00

C- 1.43

D- 1.20

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Show your calculations and explanation please.

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