A Firm Has a Degree of Financial Leverage of 1

question 39

Multiple Choice

A firm has a degree of financial leverage of 1.20.If earnings before interest and tax increase by 20%,then net income:

• A)will not necessarily change.
• B)will increase by 20%.
• C)will decrease by 24%.
• D)will decrease by 20%.
• E)None of the answers are correct.

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Definitions:

Social Networks

Structures made up of individuals or organizations connected by one or more specific types of interdependency, such as friendships, kinship, common interests, financial exchange, or relationships of beliefs.

Political Cohorts

Groups of individuals or entities that share similar political views or objectives, often working together for common goals.

Relative Deprivation Theory

The hypothesis that individuals assess their well-being based on comparisons with others, which can lead to feelings of deprivation when seeing others as better off.

Non-routine Collective Action

Non-routine collective action refers to unplanned, spontaneous group activities that arise in response to an event, issue, or situation, typically outside the norms of established societal patterns.