Bubby's Bristles generated sales of $250,000 in the latest year. During this same period, the firm's EBIT was $150,000. If the firm were to incur $25,000 in interest expense, what is Bubby's degree of financial leverage? a. 0.83 b. 1.2 c. 3.7 d. 5.3

Bubby's Bristles generated sales of $250,000 in the latest year. During this same period, the firm's EBIT was $150,000. If the firm were to incur $25,000 in interest expense, what is Bubby's degree of financial leverage? a. 0.83 b. 1.2 c. 3.7 d. 5.3

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 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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Financial accounting question

Bubby's Bristles generated sales of $250,000 in the
latest year. During this same period, the firm's EBIT
was $150,000.
If the firm were to incur $25,000 in interest expense,
what is Bubby's degree of financial leverage?
a. 0.83
b. 1.2
c. 3.7
d. 5.3

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