Lombardo Company Had Net Income of $70,000 and Interest Expense

question 165

Multiple Choice

Lombardo Company had net income of $70,000 and interest expense of $10,000. If the corporate tax rate was 30%, determine its Degree of Financial Leverage (DFL) .

• A) 1.30
• B) 1.25
• C) 1.20
• D) 1.15
• E) 1.10

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