A Firm Has EBIT of $3

question 175

Multiple Choice

A firm has EBIT of $3.6M and debt of $15M on which it pays 8% interest. What is its Degree of Financial Leverage (DFL) ?

• A)1.0
• B)1.4
• C)1.5
• D)1.6

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Definitions:

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, coordinating its actions and sensory information.

Endorphins

Natural chemicals in the body that interact with the brain's receptors to reduce pain and boost pleasure, resulting in a feeling of well-being.

Dendrite

The branched extensions of a neuron that receive signals from other neurons or sensory receptors.

Myelin

A fatty substance that forms a sheath around the axons of neurons, increasing the speed at which impulses propagate.