After-tax operating income for a leveraged firm is defined as:
A) net income + after-tax interest.
B) EBIT × (1 − tax rate).
C) net income + depreciation.
D) profit margin × sales.

Question

Quizplus · Accepted Answer

After-tax operating income for a leveraged firm is calculated as net income plus after-tax interest, as it accounts for the interest expense that is tax-deductible.

After-Tax Operating Income for a Leveraged Firm Is Defined As