The higher the degree of financial leverage (DFL), the greater the leverage a given financing plan has, and the steeper its slope when plotted on EBIT-EPS axes.

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This statement is true. The degree of financial leverage (DFL) measures the sensitivity of earnings per share (EPS) to changes in earnings before interest and taxes (EBIT). A higher DFL means that a company has a greater degree of financial leverage, which can amplify both profits and losses. When plotted on EBIT-EPS axes, a higher DFL will result in a steeper slope for a given financing plan, indicating the greater impact of changes in EBIT on EPS.

The Higher the Degree of Financial Leverage (DFL), the Greater