DFL and graphical display of financing plans Wells and Associates has EBIT of $65,600. Interest costs are $18,100, and the firm has 15,900 shares of common stock outstanding. Assume a 40% tax rate. a. Use the degree of financial leverage (DFL) formula to calculate the DFL for the firm. b. Using a set of EBIT-EPS axes, plot Wells and Associates' financing plan. c. If the firm also has 1,100 shares of preferred stock paying a $5.50 annual dividend per share, what is the DFL? d. Plot the financing plan, including the 1,100 shares of $5.50 preferred stock, on the axes used in part (b). e. Briefly discuss the graph of the two financing plans. a. The degree of financial leverage is (Round to two decimal places.)