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)?
20%
40%
50%
60%
Answers
Answer:
2trfjgfsg heavy v re dh5dh
Answer:
60% . 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
Explanation:
To get a corporation's DFL, divide its percent exchange in EPS by means of its percentage alternate in EBIT at some point of a particular term.
The EBIT of a agency divided by means of the EBIT much less hobby charge additionally may be used to calculate it. profits consistent with percent of a business enterprise are more risky while there may be financial debt.
A commercial enterprise organization's EPS will alter more dramatically in reaction to variations in EBIT as its monetary leverage increases.
For investors, this will growth the chance of the EPS movement. A leverage ratio referred to as the diploma of economic leverage (DFL) assesses how sensitive a enterprise's earnings in step with percentage (EPS) are to modifications in running income added on by modifications to its capital shape.
To learn more about EBIT visit
https://brainly.in/question/21426773
https://brainly.in/question/8423611
#SPJ3