A firm has sales of 10 million variable costs of 5 million, Ask an Expert

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A firm has sales of $10 million, variable costs of $5 million, EBIT of $2 million, and a degree of combined leverage of 3.0.

a. If the firm has no preferred stock, what are its annual interest charges?

b. If the firm wishes to reduce its degree of combined leverage to 2.5 by reducing interest charges, what will be the new level of annual interest charges?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92090475

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