Degree of __________ is the ratio of the percentage increase in Earning Per Share (EPS) to the…
The degree of financial leverage measures the percentage change in EPS relative to the percentage change in EBIT. It captures how fixed financing charges amplify the effect…
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Degree of __________ is the ratio of the percentage increase in Earning Per Share (EPS) to the percentage increase in Earnings Before Interest and Taxes (EBIT).
Answer and explanation
Correct answer D
The degree of financial leverage measures the percentage change in EPS relative to the percentage change in EBIT. It captures how fixed financing charges amplify the effect of changes in operating earnings on earnings available to equity shareholders.
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Jammu & Kashmir and Ladakh SET (JKSET/LASET)