Asked by
Baldemiro Delvalle
on Dec 01, 2024
Verified
A firm has EBIT of $3.6M and debt of $15M on which it pays 8% interest. What is its Degree of Financial Leverage (DFL) ?
A) 1.0
B) 1.4
C) 1.5
D) 1.6
Degree Of Financial Leverage (DFL)
A measure that evaluates the sensitivity of a company's earnings per share to fluctuations in its operating income, indicating financial risk.
Interest
The return on a debt investment.
- Conduct calculations and interpretations related to the financial leverage degree of a company.
Verified Answer
ND
Learning Objectives
- Conduct calculations and interpretations related to the financial leverage degree of a company.