What Does a Degree of Financial Leverage (DFL) of 2

question 33

Multiple Choice

What does a degree of financial leverage (DFL) of 2.0 indicate?

• A) For every 1 percent change in sales, the EBIT will change by 2 percent.
• B) For every 1 percent change in EPS, the sales will change by 2 percent.
• C) For every 1 percent change in EBIT, the EPS will change by 2 percent.
• D) For every 1 percent change in EPS, the EBIT will change by 2 percent.
• E) For every 1 percent change in EBIT, the sales will change by 2 percent.

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Definitions:

Republican Platform

The set of policies, values, and ideals endorsed and promoted by the Republican Party in the United States.

Upper South

A geographic term referring to the northernmost states of the Southern United States, characterized by a mix of industrial and agricultural economies.

Free Soil

A political movement in the mid-19th century that opposed the expansion of slavery into the western territories of the United States.

Confederate States of America

The coalition of 11 southern U.S. states that seceded from the Union, leading to the American Civil War.