A firm has a degree of financial leverage of 1.20.If earnings before interest and tax increase by 20%, then net income:
A) will not necessarily change
B) will increase by 20%
C) will decrease by 24%
D) will decrease by 20%
E) none of the answers are correct

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The Answer of A firm has a degree of financial leverage of 1.20.If earnings before interest and tax increase by 20%, then net income:
A) will not necessarily change
B) will increase by 20%
C) will decrease by 24%
D) will decrease by 20%
E) none of the answers are correct

A Firm Has a Degree of Financial Leverage of 1