The degree of financial leverage (DFL) is defined as the percentage change in ______ that results from a particular percentage change in _____.
A)earnings before interest and taxes (EBIT); sales
B)sales; earnings per share (EPS)
C)EPS; sales
D)EPS; EBIT
E)sales; EBIT

Question

The degree of financial leverage (DFL) is defined as the percentage change in ______ that results from a particular percentage change in _____. 
A)earnings before interest and taxes (EBIT); sales
B)sales; earnings per share (EPS)
C)EPS; sales
D)EPS; EBIT
E)sales; EBIT

Quizplus · Accepted Answer

The degree of financial leverage (DFL) is defined as the percentage change in EPS that results from a particular percentage change in EBIT.

The Degree of Financial Leverage (DFL) Is Defined as the Percentage