What Would Be the Degree of Financial Leverage for Under

Multiple Choice

What would be the degree of financial leverage for Under A Cloud Skydiving School if the company will have earnings before interest and taxes of $750,000, which would be a 15% increase? The firm had EPS of $1.25 but, with the increased earnings, anticipates paying $1.37.

A) 0.80
B) 1.08
C) 2.01
D) 1.25