EBIT measures operating efficiency only, while ROE and EPS measure only financial efficiency.
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Q121: Financial risk, which makes a firm's ROE
Q122: It is a basic truth that financial
Q123: The DFL quantifies the effect of leverage,
Q124: The ROCE measures the profitability of operations
Q125: An increase in financial leverage will always
Q127: DFL equals EBIT / (EBIT - I).
Q128: The optimal capital structure maximizes stock price.
Q129: The optimal capital structures can be precisely
Q130: As a company increases its financial leverage,
Q131: A firm's target capital structure is management's
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