Wildlife Co. reported net income of $8.3 million, interest expense of $.5 million and is are in a 30% tax rate bracket. Wildlife's average total assets are $65.8 million and average stockholders' equity is $48.6 million. Wildlife's financial leverage percentage is closest to:
A) 3.7%
B) 4.5%
C)4.0%
D)4.7%

Question

Quizplus · Accepted Answer

Financial leverage = (Total assets / Stockholders' equity) x (1 - Tax rate)= (65.8 / 48.6) x (1 - 0.30)= 4.0%