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A firm has EBIT of $355,000, interest expense of $55,000, preferred dividends of $6,000 and a tax rate of 28%. The firm's degree of financial

A firm has EBIT of $355,000, interest expense of $55,000, preferred dividends of $6,000 and a tax rate of 28%. The firm's degree of financial leverage at a base EBIT level of $355,000 is (and why?)

A. 0.97 

B. 1.09 

C. 1.22 

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