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If EBIT Equals $280,000 and Interest Equals $20,000, with a Tax

Question 31

Multiple Choice

If EBIT equals $280,000 and interest equals $20,000, with a tax rate of 31%, what is the degree of financial leverage?

A) 14.00x
B) 9.66x
C) 3.91x
D) 1.08x

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