If a Firm's EBIT Changes by 20% and It Has

question 185

Multiple Choice

If a firm's EBIT changes by 20% and it has a degree of financial leverage (DFL) of 2.5, what is the expected change in earnings per share (EPS) ?

• A)20%
• B)40%
• C)50%
• D)60%

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Definitions:

Bromo-Methylbutane

An organic compound that contains a bromine atom attached to a butane chain, often used in nucleophilic substitution reactions.

Organic Product

Organic product often refers to a molecule resulting from organic synthesis, especially in the context of organic reactions.

Methanol

The simplest alcohol, with the chemical formula CH3OH, used as a solvent, antifreeze, fuel, and in the production of formaldehyde.

Ethanol

A two-carbon alcohol (C2H5OH) commonly used as a solvent, fuel, and in alcoholic beverages.