question archive If a firm has current earnings before interest and taxes of $100,000 and interest expense of $10,000, its degree of financial leverage would be: Group of answer choices 1
If a firm has current earnings before interest and taxes of $100,000 and interest expense of $10,000, its degree of financial leverage would be: Group of answer choices 1
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If a firm has current earnings before interest and taxes of $100,000 and interest expense of $10,000, its degree of financial leverage would be: Group of answer choices
1.11
0.10
1.10
10
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Answer: 1.11
Degree of Financial Leverage
= EBIT / (EBIT- Interest Expenses)
= 100,000 / (100,000- 10,000)
= 1.11
