If a Firm Has Current Earnings Before Interest and Taxes

question 120

Multiple Choice

If a firm has current earnings before interest and taxes of $100,000 and interest expense of $10,000, its degree of financial leverage would be:

• A)10
• B)1.11
• C).10
• D)cannot tell from this information

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Definitions:

Social Networking

The use of internet-based platforms and websites to connect with others, share information, and build networks.

Virtual Reality

A simulated experience created by computer technology, which can replicate or create an environment for users to interact with.

Location-Based Services

Digital services that use geographic data and information to provide services or information relevant to the user's current location.

Compositional

Pertaining to the way in which something is composed or arranged, often referring to art, music, or literature.