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

question 166

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If a firm's EBIT changes by 20% and it has a degree of financial leverage (DFL) of 2.0, what is the expected change in earnings per share (EPS) ?


Definitions:

Liability

A legal obligation or responsibility; in financial terms, it refers to debts or monetary obligations a company or individual owes to others.

Employer

A person or entity that hires and employs workers, providing wages or salary in exchange for labor or services.

Enforceable

Capable of being imposed or upholding through legal means.

Liability

The state of being legally responsible for something, typically involving debt or legal obligations.

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