- CFA Exams
- 2021 CFA Level I Exam
- Study Session 11. Corporate Finance (2)
- Reading 34. Measures of Leverage
- Subject 3. Total Leverage and Breakeven Points
CFA Practice Question
Consider a firm with sales of $500,000, cost of goods sold of $245,000, fixed operating costs of $50,000, and a financing expense of $60,000. The degree of total leverage for this firm is ______.
B. 1.41
C. 1.76
A. 1.10
B. 1.41
C. 1.76
Correct Answer: C
DTL = (S - VC)/(EBIT - I) = ($500 - $245)/($500 - $245 - $50 - $60) = 1.76
User Contributed Comments 3
User | Comment |
---|---|
setmefree | DTL = (S-VC)(S-VC-F-I) |
2014 | DTL = Q(p-v)/Q(p-v)-f-c |
khalifa92 | laugh at me DTL= S-VC/S-VC-F * S-VC-F/S-VC-FC-C it worked tho xD |