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Summit Corporation has an EBIT of $3,600,000 and interest expense of $600,000. Calculate its Degree of Financial Leverage (DFL). a. 6.0 b. 1.2 c. 0.167 d. Not enough information

Summit Corporation has an EBIT of $3,600,000 and interest expense of $600,000. Calculate its Degree of Financial Leverage (DFL). a. 6.0 b. 1.2 c. 0.167 d. Not enough information

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter21: Dynamic Capital Structures And Corporate Valuation
Section: Chapter Questions
Problem 2MC
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Summit Corporation has an EBIT of $3,600,000 and interest expense of $600,000. Calculate its Degree of Financial Leverage (DFL). a. 6.0 b. 1.2 c. 0.167 d. Not enough information
Transcribed Image Text:Summit Corporation has an EBIT of $3,600,000 and interest expense of $600,000. Calculate its Degree of Financial Leverage (DFL). a. 6.0 b. 1.2 c. 0.167 d. Not enough information
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