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Need C)5. Albatross Airline’s fixed operating costs are $5.8 million, and its variable cost ratiois 0.20. The firm has $2 million in bonds outstanding with a coupon interest rateof 8 percent. Albatross has 30,000 shares of preferred stock outstanding, which paysa $2.00 annual dividend. There are 100,000 shares of common stock outstanding.Revenues for the firm are $8 million, and the firm is in the 40 percent corporateincome tax bracket. Compute the following for the firm:•a. Degree of operating leverage•b. Degree of financial leveragec. Degree of combined leverage and interpret this value
Need C) Ch14-5. Albatross Airline’s fixed operating costs are $5.8 million, and its variable cost ratio is 0.20. The firm has $2 million in bonds outstanding with a coupon interest rate of 8…
