General Studies · Leverage Analysis
How is the Degree of Financial Leverage (DFL) defined?
- 1The percentage change in sales relative to a percentage change in earnings before interest and taxes (EBIT)
- 2The percentage change in interest rates relative to the quantum of debt
- 3The percentage change in earnings per share (EPS) relative to a percentage change in earnings before interest and taxes (EBIT)✓
- 4The percentage change in earnings before interest and taxes (EBIT) relative to a percentage change in sales
Correct answer
The percentage change in earnings per share (EPS) relative to a percentage change in earnings before interest and taxes (EBIT)
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