Given the Following Financial Data for Cosmos, Compute the Firm's

Given the following financial data for Cosmos, compute the firm's degree of financial leverage. $$\begin{array} { l r r } & \text { Last Year } & \text { This Year } \\\text { Sales } & \$ 780,000 & \$ 874,000 \\\text { Fixed costs } & 195,000 & 218,500 \\\text { Variable costs } & 460,200 & 524,400 \\\text { EBIT } & 124,800 & 131,100 \\\text { Interest } & 46,800 & 52,400 \\\text { EPS } & \$ 0.42 & \$ 0.51\end{array}$$

A) 23.81
B) 4.24
C) 0.42
D) 2.18

Correct Answer:

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