Based on the below data, compute for the Degree of Financial Leverage: Sales 100,000,000 Variable Cost 40,000,000 Fixed Cost 40,000,000 Capital employed of the company 80,000,000 Debts (carries 10% interest) 40,000,000

Based on the below data, compute for the Degree of Financial Leverage: Sales 100,000,000 Variable Cost 40,000,000 Fixed Cost 40,000,000 Capital employed of the company 80,000,000 Debts (carries 10% interest) 40,000,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 11P

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Based on the below data, compute for the Degree of Financial Leverage:

Sales 100,000,000

Variable Cost 40,000,000

Fixed Cost 40,000,000

Capital employed of the company 80,000,000

Debts (carries 10% interest) 40,000,000

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