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The following table is extracted from the income statement of Al Hajir Private Ltd. The company is having 1,000 common stocks, long term debt interest

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The following table is extracted from the income statement of Al Hajir Private Ltd. The company is having 1,000 common stocks, long term debt interest is OMR 2,000 and Preferred stock dividend is OMR 2400. Answer the following question after analyzing the given table YEAR 1 YEAR 2 Earnings before interest and taxes (EBIT) 8,000 32,000 Less: Interest 2,000 ? Net profit before tax 6,000 ? Less: Tax(0.40) 2,400 ? Net profit after tax 3,600 ? Less: Preferred stock dividend 2,400 ? Earnings available for common shareholders 1,200 ? Earnings Per Share(EPS) 1.2 ? a. Complete the table for the year 2 b. Calculate the Degree of Financial Leverage (DFL). c. Interpret your answer (DFL)

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