A Corporation has P1,500,000 in debt outstanding. The company's before-tax cost of debt is 10%. Sales for the year is P3,500,000 and variable costs account for 60% of sales. Net income is P600,000. The company's after-tax rate was 60%. If A's degree of total leverage is 1.40, what is its degree of operating leverage? A 1.15 B 1.00 C 1.22 D 1.12

A Corporation has P1,500,000 in debt outstanding. The company's before-tax cost of debt is 10%. Sales for the year is P3,500,000 and variable costs account for 60% of sales. Net income is P600,000. The company's after-tax rate was 60%. If A's degree of total leverage is 1.40, what is its degree of operating leverage? A 1.15 B 1.00 C 1.22 D 1.12

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 7P

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