Question
BICs EBIT is this year is $80,000. They paid $20,000 in interest and $25,000 in Dividends. The tax rate is 40%. A. What is their
BIC’s EBIT is this year is $80,000. They paid $20,000 in interest and $25,000 in Dividends. The tax rate is 40%.
A. What is their DFL? Note: DFL = EBIT/ (EBIT – I)
B. Verify your answer by assuming a 10% increase in EBIT
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
