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Kermit's Hardware's fixed operating costs are $20.8 million and its variable cost ratio is .30. the firm has $10 million in bonds outstanding with a

Kermit's Hardware's fixed operating costs are $20.8 million and its variable cost ratio is .30. the firm has $10 million in bonds outstanding with a coupon interest rate of 9%. KH has 200,000 shares of common stock outstanding. The firm has revenues of $32.2 million and its marginal tax rate is 40%. Compute KH's degree of financial leverage.

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