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problem: A company has sales of 10 million dollar, variable costs of $5 million, EBIT of $2 million, & a degree of combined leverage of 3.0.

[A] If the company has no preferred stock, find out its annual interest charges?

[B] If the company wishes to lower its degree of combined leverage to 2.5 by decreasing interest charges, find out the new level of annual interest charges be?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919465

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