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Finance Leverage Analysis - Calculation of interest expenses

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Calculation of interest expenses at required combined leverage - 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?

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									              Sub: Finance                                                                   Topic: Leverage Analysis

              Question:
              Calculation of interest expenses at required combined leverage.
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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 lower its degree of combined levera
								
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