Please provide correct answer A company has an EBIT of $2,400,000 and aninterest expense of $300,000. What is its DFL?a. 8.0b. 0.125c. 1.1429d. Not enough information to determine the answer.

The Degree of Financial Leverage (DFL) is calculated as:DFL = EBIT / (EBIT - Interest…

Answered: A company has an EBIT of $2,400,000 and…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 3P

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A company has an EBIT of $2,400,000 and an interest expense of $300,000. What is its DFL? a. 8.0 b. 0.125 c. 1.1429 d. Not enough information to determine the answer.