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    Degree of financial leverage

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    4. Parker Investments has EBIT of $20,000, interest expense of $3,000, and preferred dividends of $4,000. It pays taxes at a rate of 38%, what is Parker's degree of financial leverage (DFL) at a base level EBIT of $20,000?

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    Solution Summary

    The solution provides a step-by-step explanation on how to calculate the degree of financial leverage (DFL) at a base level EBIT.

    $2.19