Q #01: Following data is related to company A and B

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Q #01: Following data is related to company A and B. Company A Company B EBIT 50,000 62,000 Fixed Cost 10,000 33,000 Variable Cost 20,000 12,000 Interest Cost 7,000 15,000 Preferred Dividends 5,000 8,000 Tax rate 30% 30% A) What is degree of operating leverage and degree of financial leverage for both firms. Interpret your answer also. B) What will be degree of total leverage for both firms? Interpret your answer.