Table 1 has the following plans: Plan 1 with interest expense of R25000, Preferred dividend of 3000 and common outstanding shares of 200000. Plan 2 with interest expense of R50000, Preferred dividend of R1500 and 100000 outstanding common shares. What is the degree of financial leverage at a base level EBIT of R120,000 for both financing plans? The firm has a 40 percent tax rate. (See Table 1)

A. Plan 1 = 1.73 and Plan 2 = 1.82

B. Plan 1 = 1.43 and Plan 2 = 1.62

C. Plan 1 = 1.33 and Plan 2 = 1.78

D. Plan 1 = 1.93 and Plan 2 = 1.22

NB : multiple choice question