Luxury Leisures forecasted EBIT is $750,000. This year, Luxury will pay $250,000 interest on its debt and

Question:

Luxury Leisure’s forecasted EBIT is $750,000. This year, Luxury will pay $250,000 interest on its debt and $320,000 dividends to its common stockholders. If its marginal tax rate is 40 percent, what is Luxury’s degree of financial leverage (DFL)?

Fantastic news! We've Found the answer you've been seeking!