The degree of financial leverage is the multiplication factor by which debt to equity changes as new debt is issued.

Name: The degree of financial leverage is the multiplication factor by which debt to equity changes as new debt is issued.
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The degree of financial leverage measures how a company's earnings before interest and taxes (EBIT) change in response to a change in its operating income, not the change in debt to equity as new debt is issued.

The Degree of Financial Leverage Is the Multiplication Factor by Which