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Question: npat is if ebit is 50000 while interest expense is...

Question details

NPAT is

If EBIT is $50,000 while interest Expense is $10,000 and Tax = $12,000 then the Degree of Financial Leverage (DFL) is:

A.

5

B.

1.2

C.

1.25

D.

1.79

A.

(EBIT - (Debt x Kd)) x (1 - t)

B.

EBIT x (1 - t)

C.

EBIT x DFL

D.

(EBIT + Interest Expense) x ( 1 - t)

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