Given the following financial data for Cosmos, compute the firm's degree of financial leverage. $$\begin{array} { l r r }
& \text { Last Year } & \text { This Year } \
\text { Sales } & \$ 780,000 & \$ 874,000 \
\text { Fixed costs } & 195,000 & 218,500 \
\text { Variable costs } & 460,200 & 524,400 \
\text { EBIT } & 124,800 & 131,100 \
\text { Interest } & 46,800 & 52,400 \
\text { EPS } & \$ 0.42 & \$ 0.51
\end{array}$$
A) 23.81
B) 4.24
C) 0.42
D) 2.18

Question

Given the following financial data for Cosmos, compute the firm's degree of financial leverage. $$\begin{array} { l r r } 
& \text { Last Year } & \text { This Year } \
\text { Sales } & \$ 780,000 & \$ 874,000 \
\text { Fixed costs } & 195,000 & 218,500 \
\text { Variable costs } & 460,200 & 524,400 \
\text { EBIT } & 124,800 & 131,100 \
\text { Interest } & 46,800 & 52,400 \
\text { EPS } & \$ 0.42 & \$ 0.51
\end{array}$$
A) 23.81
B) 4.24
C) 0.42
D) 2.18

Quizplus · Accepted Answer

The Answer of Given the following financial data for Cosmos, compute the firm's degree of financial leverage. $$\begin{array} { l r r } 
& \text { Last Year } & \text { This Year } \
\text { Sales } & \$ 780,000 & \$ 874,000 \
\text { Fixed costs } & 195,000 & 218,500 \
\text { Variable costs } & 460,200 & 524,400 \
\text { EBIT } & 124,800 & 131,100 \
\text { Interest } & 46,800 & 52,400 \
\text { EPS } & \$ 0.42 & \$ 0.51
\end{array}$$
A) 23.81
B) 4.24
C) 0.42
D) 2.18

Given the Following Financial Data for Cosmos, Compute the Firm's