A firm has ebit of 375000 interest expense of 75000
A firm has EBIT of $375,000, interest expense of $75,000, preferred dividends of $6,000 and a tax rate of 40%. The firm's degree of financial leverage at a base EBIT level of $375,000 is:
A. .97
B. 1.29
C. 1.27
D. 1.09
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