If EBIT Increases 15%,EPS Increases by 30%,debt Increases by 45%,and

question 21

Multiple Choice

If EBIT increases 15%,EPS increases by 30%,debt increases by 45%,and the tax rate declines by 5%,what is the degree of financial leverage?

• A) 2
• B) 1
• C) 9
• D) 3
• E) 6

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Definitions:

Population Growth

The increase in the number of individuals in a population, often measured by birth rate minus death rate plus migration.

Economic Development

Economic Development refers to the process by which a region improves the well-being of its citizens through economic growth, redistribution of wealth, and improvements in quality of life.

Birth Rate

The number of live births per thousand of population per year.

Death Rate

The number of deaths in a particular population, scaled to the size of that population, per unit of time.