Albatross Airlines fixed operating costs are $5.8 million, and its variable cost ratio is 0.10. The firm has $1.1 million in bonds outstanding with a coupon interest rate of 9 percent. Albatross has 20,000 shares of preferred stock outstanding, which pays a $2.15 annual dividend. There are 100,000 shares of common stock outstanding. Revenues for the firm are $7 million, and the firm is in the 40 percent corporate income tax bracket. Compute the following for the firm. Round your answers to three decimal places.

1. Degree of operating leverage:

2. Degree of financial leverage:

3. Degree of combined leverage:

   Interpret this value. Enter your answer for dollar value in whole dollar. For example, an answer of $1.20 million should be entered as 1,200,000, not 1.20.

   From a base -Select-salesEBITEPSItem 4 level of $ , each one percent increase in -Select-salesEBITEPSItem 6 results in a percent -Select-increasedecreaseItem 8 in -Select-salesEBITEPSItem 9 .